How the Fico or credit score impacts on consumers Research Paper

How the Fico or credit score impacts on consumers - Research Paper Example A lot of consumers don't appreciate the importance of personal credit scores and how it impacts on their daily lives. Some don’t know that credit scores are available and accessible online. A credit score can have a say on what a consumer is or is not able to do. For instance, it can determine what one pays for leasing or auto financing, credit card rates, car insurance and mortgages. It can affect things we may take for granted like whether one gets a job or rent an apartment. When applying for credit, the lenders want to know your credit risk level Buyers or consumers with poor credit (high credit risk level) are turned away by the lending institutions. The current tightening up of the loan and mortgage market makes the situation worse. Customers with less than a 700 credit score are being turned away by car dealers. It is now more important than ever to have a good credit score. Keywords: Credit score, FICOÂ ®, consumers, lenders. What is a Credit Score? A credit score is a number that summarizes your credit risk, based on your credit report at a particular point in time (FICO Booklet). Credit reports and credit risk levels can be evaluated using your credit scores by the lenders. Since it’s just a single number, the lenders don’t have to read through the whole credit history report. It is an indicator of how likely you are to pay your bills. Consumers should be aware that lenders use other information to determine one’s creditworthiness along with the credit scores.... A high score is preferred by the lenders. For instance a score of 720 will get you favorable interests on a mortgage, according to Fair Isaac Corporation. The following table shows how credit scores break out for the American public. Credit Score Percentage 499 and below 2 percent 500 – 549 5 percent 550 – 599 8 percent 600 – 649 12 percent 650 – 699 15 percent 700 – 749 18 percent 750 – 799 27 percent 800 and above 13 percent Components of the FICO Score A credit report contains different types of credit data. It is this data that is used to compute the FICO Scores. Data is grouped into five categories as illustrated below. The percentage represents the importance of each category in computation of your FICO Score. Source: Fair Isaac Corporation Website Items considered in the payment history are account payment information (credit cards, mortgage and retail accounts), Public records (legal suits, bankruptcy, liens and judgments) and delinqu ency, Severity of delinquency, recency of delinquency and adverse public records, past due items on file and accounts paid on time. Amounts owed is checked for the amounts owing on the specific types of accounts, number of accounts with balances, proportion of credit lines used and proportion of installment loan amounts still owing The line of credit history is concerned with the time duration since the accounts were opened and other account activities that have taken place. New credit category is used to check recently opened accounts, recent credit inquiries, last duration of credit inquiry and positive credit history re-establishment following repayment problems Lastly, types of credit used category looks at the recent information on the various types of accounts, be they

Analysis of Walmart leadership Research Paper Example | Topics and Well Written Essays - 750 words

Analysis of Walmart leadership - Research Paper Example Further, he convinces them to change their perceptions, and expectations in the process of achieving a common goal. According to Bass, the transformational leadership is made up of several elements such as; focusing on vital priorities, promoting harmony and unity, motivating followers/workers to focus on a common organization goal, and being consistent in decision making. Thus, transformational leadership moves the subject/follower beyond their immediate self interests via inspiration, individualized consideration and intellectual stimulation. Also, transactional leadership tends to refer to the mutual relationship between the follower and the leader to exchange ideas so as to meet their self interests (Bass, 1985; Yammarino et al., 1993). Transformational leadership tends to produce greater positive effects than other leadership styles. The leaders at Walmart utilize this leadership style while running the organization. The transformational theory is made up of four critical elements; inspirational motivation, intellectual stimulation, idealized influence and individualized consideration. Transformational leadership often leads to excellent performance that tends to go beyond the expected outcomes. Lowe et al. (1996) in his analysis of more than 39 studies done to evaluate transformational theory and leadership found out that leaders who exhibited transformational characteristics proved to be more effective leaders than those who did not. Further he stated that these findings were applicable to both higher and lower level leaders as well as to mangers/leaders working in private and public settings. Tracey and Hinkin (1994, 1996) sought to analyze the nature and formation of transformational leadership in the hospitality industry. Their findings indicated that organizational success in the hospitality business industry required leaders who were able to utilize their vision and recognize the relevant environmental changes and how to manage them