What is a credit scorecard?
A credit scorecard is a model used to estimate how likely a credit applicant is to repay a loan based on information about the applicant's credit history.
Where have you heard about credit scorecards?
Credit scorecards are used by most lenders, and you've probably heard the term if you've ever applied for a bank loan. The most widely-used credit scoring model was created by Fair Isaac Corporation (FICO).
What you need to know about credit scorecards.
Credit scorecards generate credit scores. Your credit score will be a number between 300 and 850. The higher the number, the better the score - and the better deal a bank or another lender will give you, including a lower interest rate.
Scorecards use a variety of techniques to estimate how likely someone is to default on their loan. Some of these techniques include logistic regression and probit. The best way to increase your trustworthiness in the eyes of a credit scorecard is by paying bills on time and avoiding debt.
Find out more about credit scorecards.
Potential investors and lenders like banks will often ask for your credit reference. Find out all about it here.