Most of us know a few basic facts about credit score. It is a score used to asses one's ability to pay his loan. Banks use this calculation before offering a loan to someone. Besides, there is another quantity that measures your ability to qualify for a loan which is called the Bankruptcy Risk Score. If this score is found to be poor for an individual, he can be debarred from getting a loan. Since the inception of personal bankruptcy law, the creditors felt the difficulty of recovering their losses. As per statistics, in 2005, 31.6% more people filed bankruptcy, which was a record that time.

Nowadays, the new personal bankruptcy law is modified in such a way that it helps both a debtor and a creditor. Various debt management plans and credit card counseling programs too do not help banks much. That's why banks calculate a new quantity to assess an individual's payback capacity. This score helps the banks when someone applies for a loan or a credit card. Banks typically ask for a credit score and outstanding bills report to correlate your spending habits and credit score.

Unlike a credit score, this score predicts your chances of filing a bankruptcy. The range of this score is -200 to 2018. A higher value of this score indicates your higher chances of becoming a defaulter. A consumer is never aware about this own credit score. Usually, banks and credit report companies prepare it. To know more, it is advisable to look for risk score information on loan and mortgage websites on the net.