The ‘score‘ or credit score is taken into account by financial institutions to approve a loan. Learn what it is and how it is calculated.
Information on the debts that members and retirees of the Ecuadorian Social Security Institute (IESS) have with their bank, Biess, has been shared with the credit bureaus since December 2024.
The bureaus are companies that collect information about the behavior of people in paying loans with banks, cooperatives, commercial houses, car dealerships and telecommunications companies. With the data provided by financial entities or commercial companies, the bureaus prepare the ‘score’ or credit score of each person.
For example, a user with a score of 107 has an 85% chance of defaulting. On the other hand, someone with a score of 965 has a 3.5% chance of falling into default, according to the Superintendency of Banks. This score is taken into account by financial institutions when approving credit to a client.
What variables are taken into account?
To calculate the ‘score’ or credit score, four variables are taken into account:
The person’s payment history, that is, whether they pay on time or late.
The amounts owed.
The number of credits.
The person’s credit history, that is, how long they have accessed credit from financial institutions or commercial houses. The score only gets better or worse based on each person’s debt payment habits.
How to know your score?
In Ecuador, there are three credit bureaus (Equifax, Aval and Redclic) authorized to prepare the credit score. People who have accessed credit can request their score from the bureaus for free or at a cost, but with more detailed information.
The Superintendency of Banks can also provide the ‘score’ for free, but this entity only takes into account debts with banks, mutual societies and savings and credit cooperatives for its analysis. The procedure is in person.
By: PRIMICIAS