In the simplest of terms, lenders use credit scores in three primary areas of their businesses: 1) as part of the process for evaluating credit applications, 2) identifying potential new customers that meet their approval profiles, thereby creating a list of consumers to receive credit offers (often called account acquisition strategies), and 3) monitoring the relative health of credit management among current credit customers. The common bond between all three scenarios is the overarching business strategy employed by the lender. Some lenders choose to extend credit only to those with the best credit record. Other lenders may exclusively target so-called “subprime” consumers, while other lenders offer credit to the vast majority of consumers between those two extremes…
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