How Your Credit is Scored at CoastHills
CoastHills Federal Credit Union is a nondiscriminatory lender. We use an accredited credit scoring system. Credit scoring can be defined in different ways. In the most basic terms, a credit scoring system is a statistically oriented product that predicts the likelihood that a specific person will repay a debt. The theory underpinning the entire process is that past performance is an accurate predictor of future behavior.
More practically, credit scoring is the process of collecting information on an applicant, analyzing that information, assessing the risk involved in extending credit to the applicant, and making a decision to accept or decline the applicant based on the assessed risk.
Under the terms of the Equal Credit Opportunity Act (ECOA) as implemented by Regulation B, the Federal Reserve defines a credit score system as:
A system that evaluates an applicant’s creditworthiness mechanically based on key attributes of the applicant and aspects of the transaction and that determines alone or in conjunction with an evaluation of additional information about the applicant, whether an applicant is deemed creditworthy.
Credit scoring uses widely accepted statistical techniques to build mathematical models. These models, which are built using thousands of customer profiles, quantify the risk associated with individual loans. Experience has proven them very effective in predicting the likely outcome. The core of a credit scoring system is a scorecard. A scorecard is a list of general applicant characteristics, which have predictive value, based upon detailed analysis. Each of these characteristics will have two or more attributes to which statistical weights have been assigned.
A scorecard is used by an institution to evaluate individual applications for credit. The institution determines the minimum score at which applicants will be accepted. Below this cut-off score, the scorecard recommends applicants be declined.
CoastHills uses a scoring system based on application information and credit history. The name of this decisioning product is Faststart developed by Experian/Scorex credit reporting systems. Members wanting to know more about scoring systems should be directed to fairIssac.com for more information.
CoastHills also uses risk based pricing in determining loan interest rate. Risk based pricing is a method of pricing loans in which the interest rate charged to a member depends on the credit risk they represent. A matrix of the CoastHills scorecard (includes Faststart and BK watch) applies different loan rates for several levels of score results. The lowest rate offered goes to the lowest risk (highest score level) and the maximum rate goes to the highest risk (lowest score level). The matrix is evaluated regularly to insure the score levels and rates are appropriate.
All marketing materials are distinctly marked when an interest rate is indicated with “for qualified applicants”. Besides saying "for qualified borrowers", we also always say in all marketing pieces "rate as low as" which indicates that this is the lowest (best) rate and that rates go higher from this point.
Click here to find out your credit score or receive copies of your credit report.
Who to Contact for Copies of Your Credit Report
Effective 12/1/04, under the Fair and Accurate Credit Transactions Act (FACT ACT), consumers now have the ability to receive a free annual credit report from nationwide consumer reporting agencies. Previously a consumer could only get a free copy if they had been denied credit. Now, consumers in some parts of the United States will be entitled to one free credit report each year. Visit www.AnnualCreditReport.com for more information.
Please be aware if you are solicited regarding a free credit report. Only the three national credit bureaus listed below are legitimate, and they will not contact you. Only you can contact them.
Equifax Credit Bureau
P.O. Box 740241
Atlanta, GA 30374
Experian (Formerly TRW Credit Bureau)
P.O. Box 9601
Allen, TX 75013
TransUnion Corporation (Credit Bureau)
Consumer Disclosure Center
P.O. Box 34012
Fullerton, CA 92834