Precision Score

A A A

DEFINITION

A number used by the TransUnion Credit Bureau to quantify the credit worthiness of borrowers. Precision scores used to be called Empirica scores before TransUnion started using the NextGen scoring model. These scores will determine how risky it is for a lending institution to lend money to borrowers.

Don't be fooled by the name though, there are many companies that use this score but call it something else. They include:
- Experian, who uses the term "FICO Advanced Risk Score".
- TransUnion, who uses the term "Precision".
- Equifax, who uses the term "Pinnacle".

INVESTOPEDIA EXPLAINS

With precision scores, the lower the score the higher the risk for the lender, thus more interest is charged. Every bureau uses different names for their credit rating even though all use the same algorithm. The NextGen scoring model was created by the Fair Isaac Corporation and is used by each bureau - the only difference in scores will be from the information that is available to the credit bureau.


RELATED TERMS
  1. Credit Risk

    The risk of loss of principal or loss of a financial reward stemming from a ...
  2. Credit Report

    A detailed report of an individual's credit history prepared by a credit bureau ...
  3. Credit Bureau

    An agency that researches and collects individual credit information and sells ...
  4. FICO Score

    A type of credit score that makes up a substantial portion of the credit report ...
  5. Credit Score

    A statistically derived numeric expression of a person's creditworthiness that ...
  6. Beacon Score

    A number generated by the Equifax Credit Bureau to rank an individual's credit-worthiness. ...
  7. Insurance Company Credit Rating ...

    The opinion of an independent agency regarding the financial strength of an ...
  8. Corporate Credit Rating

    The opinion of an independent agency regarding the likelihood that a corporation ...
  9. Credit Rating

    An assessment of the credit worthiness of a borrower in general terms or with ...
  10. Good Credit

    A qualification of an individual's credit history that indicates that the borrower ...
Related Articles
  1. 7 Tips For The Do-It-Yourself Debt Manager
    Credit & Loans

    7 Tips For The Do-It-Yourself Debt Manager

  2. The Importance Of Your Credit Rating
    Credit & Loans

    The Importance Of Your Credit Rating

  3. 5 Keys To Unlocking A Better Credit ...
    Credit & Loans

    5 Keys To Unlocking A Better Credit ...

  4. How is my credit score calculated?
    Credit & Loans

    How is my credit score calculated?

  5. How can I improve my credit score?
    Investing

    How can I improve my credit score?

  6. Credit Cards For People With Bad Credit
    Credit & Loans

    Credit Cards For People With Bad Credit

  7. FICO Credit Score Changes – Will Yours ...
    Credit & Loans

    FICO Credit Score Changes – Will Yours ...

  8. Secured Credit Cards
    Credit & Loans

    Secured Credit Cards

  9. Why You’re Not Helping Your Credit Score ...
    Credit & Loans

    Why You’re Not Helping Your Credit Score ...

  10. Debt Consolidation: When It Helps, When ...
    Credit & Loans

    Debt Consolidation: When It Helps, When ...

comments powered by Disqus
Hot Definitions
  1. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  2. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  3. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  4. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  5. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
  6. Balanced Investment Strategy

    A portfolio allocation and management method aimed at balancing risk and return. Such portfolios are generally divided equally between equities and fixed-income securities.
Trading Center