Credit Scoring is a mathematical formula that generates your bill payment history and general financial habits into a tidy package used by lenders to help decide how worthy you are of a loan and how much it will cost.

That’s the single most important piece of information lenders use in making credit decisions.

Here are the eight secret scores lenders use to judge you.

Response Score: You know all those “pre-approved” offers you get in the mail? Someone is tallying the number you throw away and determining how likely you are to respond to pre-screened offers of credit.

Application Score: When you fill out a credit application, you divulge information about your employment, assets, income, address history, and more. This information rarely finds its way onto your standard credit report, and isn’t a factor in determining your credit score. Instead, the information is number-crunched by lenders and manipulated into your “application score.”

Revenue Score: This score measures how much money you’re likely to make the creditor. If you pay your balance off in full each month and avoid all those gotchas fees, you’re likely to have a low revenue score.

Behavior Score: This measures your overall performance with one creditor. It’s like a mini-credit score that judges your creditworthiness based solely on how you use one credit account.

Attrition Score: This score addresses the likelihood that you may leave one lender for another, or stop using one credit card in favor for a different one. If you score high enough (that is, you are likely to leave your creditor), you might start receiving convenience checks in the mail or other incentives to continue to use your current account.

Transaction Score: Also called a “fraud score,” this measures how you use your credit card. By tracking your credit card spending patterns, credit card companies can better judge whether or not a new transaction is fraudulent or not. This sometimes backfires: your creditor may shut off your card if you use it in a foreign country or make a large purchase at a store you’ve never shopped at before.

Bankruptcy Score: How likely you are to declare Chapter 7 or Chapter 13 bankruptcy? Lenders formulate a risk score that aims to predict your likelihood of declaring bankruptcy.

Collection Score: Debt collectors calculate this score for you to determine your likelihood to pay the debt you’ve defaulted on. If you have a low collection score, debt collection agencies are not as likely to aggressively pursue you, because they don’t want to waste their energy or resource trying to collect debt that is unlikely to be recovered.

Unfortunately, these scores remain largely hidden from consumers. Although the credit bureaus are legally required to show us our credit reports and scores if we ask for them, there is no similar obligation for lenders to share these “secret scores.”

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Tags: Application Score, Attrition Score, Bankruptcy Score, Behavior Score, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Collection Score, Credit Bureau, Credit Score, Fraud Score, Response Score, Revenue Score, Secret Credit Scores, Secret Scores, Transaction Score

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