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If you’ve ever applied for a credit card or loan, you’re probably aware that your credit score was used in the application review process. But that wasn’t always the case. Lenders started using credit scores for consumer loan products in the 1980s, but the roots of credit scoring came decades earlier.

In 1941, the National Bureau of Economic Research published a study by MIT management professor David Durand on reports of good and bad consumer installment loans. He analyzed how certain variables correlated to the outcome of the loans, developing an “efficiency index” that helped translate those variables into risk assessments, according to the book “Readings in Credit Scoring: Foundations, Developments, and Aims,” co-authored by Lyn C. Thomas., David B. Edelman and Jonathan N. Crook.

Durand’s statistical approach to lending decisions didn’t take off right away, but the analytics company that generates the most widely used credit scores today, Fair Isaac Corp. (FICO), was created nine years later by Stanford University researchers Bill Fair and Earl Isaac. Studies of behavioral scoring by various researchers continued throughout the ’50s, ’60s and ’70s, as the first scoring models rolled out.

According to the timeline on FICO’s website, scores started out as partnerships with various businesses, banks and insurance underwriters. Over the course of the ’80s and ’90s, credit scores were used in loan application and credit limit decisions.

The introduction of scoring was an attempt to insert some objectivity into extending credit, but consumers had little awareness of the models’ role in the process. In 2003, the Fair and Accurate Credit Transactions Act gave people the right to see their credit scores and score ranges

It helps to have an idea of what your score is before you apply for credit, so you can better anticipate your chances of getting approved. (Also, higher scores get lower interest rates.) There are hundreds of scoring models, but if you regularly look at the same score, you’ll get an idea of how your financial habits affect your score.

Today, you have lots of options for seeing your credit scores. Some credit card issuers allow you to check scores for free, and you can also purchase scores. You can see your credit scores for free at some consumer websites, including Credit.com, which offers a free account that provides you with two scores a month and tips on understanding and building your credit.

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Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

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