Credit Calculators

The tool used in procuring loans, mortgages and credit is called a "credit calculator" and is not a scientific calculator but a series of information is compiled, tabulated and calculated into mathematical formulas that concludes with answers; pertaining to what is owed, the principal payment and interest rate on a loan, mortgage or credit card bill. The average credit calculator is a form asking relevant questions about the potential borrower and the borrower's credit history, employment, the amount needed to borrow and repayment questions. This information is then investigated for accuracy and truthfulness. Then the potential borrower is contacted and the process begins in terms of calculating what the borrower needs and how much a monthly payment will be with interest. The formula is as follows for a Future Value of a loan: Future Value= (Payment x Balance Factor) - (Payment x Payment Factor)=Future Value.Very interesting is the following lik: Farmerama.

This formula is used for loans and provided there are no payoff penalties, is the standard formula. Some lending institutions will impose a payoff penalty, which is a penalty fee for paying off the loan early. This is why having a credit report done will not only let the potential borrower know where the problem lies-but where to start cleaning up one's credit. One of the most used agencies to obtain a credit report is FICO (Fair Isaac Corporation) which a credit scoring system that is heavily relied upon by credit report agencies. If bankruptcy had occurred that stays on a credit report for seven years as well as information pertain to failing to pay off debts. This information is being used sometimes to the detriment of the borrower. Nowadays companies are background checking employment history and also credit history. The practice may not be totally fair but it is being used today.

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