Pelley Law Office LLP
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Credit Scores and Bankruptcy

A credit scoring system is one that numerically weighs some or all of the factors considered in the underwriting process.  Factors are developed based on data about past borrowers from their files at consumer reporting agencies and sometimes from other sources.  Examples of factors used in a credit scoring system include payment history of past obligations, amounts owed, length of credit history, and types of credit already held.  The number of points received often determines whether the consumer is offered credit, how much credit is granted, and at what interest rate.

Credit scores are used in the industry to predict the probability that consumers with a certain score will engage in a particular behavior. The leading creator of credit scoring models is Fair Isaac & Co., also known as the FICO score.

Even though FICO develops other types of credit scores, a credit risk score is sometimes referred to as a "FICO score."  The FICO scores are derived by a generalized weighing of the following factors.

1.  Payment History (35%)
2. Amounts Owed (30%)
3.  Length of Credit History (15%)
4. New Credit (10%)
5.  Types of Credit in Use (10%).

Often times, filing a bankruptcy is the first step towards the rehabilitation of your credit score.

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1312 14th Street, Suite 100
Plano, Texas 75074

Phone: 972-608-0335
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905 North Travis Street
Sherman, Texas 75090

Phone: 903-813-4778
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6060 North Central Expressway, Suite 602
Dallas, Texas 75206

Phone: 214-733-1775
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