5-1 What are the limitations of the JCIC Credit Scoring?
The JCIC Credit Score is calculated based on the credit information in the JCIC database, which includes loans, checks, credit cards, payments, and inquires data. But positive data, such as income, bank balances and personal properties, are not being collected nor are they being used in the JCIC Credit Scoring Model. As a result, the JCIC Credit Score can only reflect the creditworthiness of the subject, which is judged on their past credit behavior. It cannot totally represent whether the subject can or will pay his/her bill on time.
Due to the above limitations, information provided by the JCIC is for reference for member institutions in their lending decision making or for other specific purposes as provided for by law. It shouldn't be the only basis for approving or rejecting a financial dealing.
5-2 Is the JCIC Credit Score being used by banks as principal reference in their decisions to issue credit cards or approve loans?
The JCIC Credit Scoring Model is a risk ranking tool based on the past credit behaviors of all observations. Its main purpose is to help members improve efficiency in making risk assessment. But still, as it only uses information from the JCIC database, which does not have positive data, and it cannot be adjusted to suit the circumstances of the individual, the JCIC Credit Score cannot be the only basis for approving or rejecting a financial dealing. In other words, the credit score is just one of the credit references when doing risk-based pricing. Lenders need to gather all sorts of credit references (such as positive data, application data), and make decisions based on their internal policies.
5-3 Can I use my JCIC Credit Score to negotiate a lower interest rate?
The JCIC Credit Score is used as a reference for financial institutions to make risk-based decisions. But it is not the only basis while determining interest rates. Base on their internal policies, financial institutions will also take personal income, personal properties and other credit references into account.