What is a Merit Score?

Short Version: Your Merit Score™ is a rating that is based on the information you submit to Loan Dilly. The more accurate and detailed information you submit, the higher your Merit Score™. A higher Merit Score™ signals to Lenders that you're a good candidate for a loan and they are more likely to lend to you.

Longer Version: Have you heard of a Credit Score? Your Merit Score™, like a credit score, is akin to a school GPA. It's a cumulative number that measures your success relative to others, in this case grading you as a credit-worthy individual. Lenders typically assign interest rates based on what bracket your score falls into. But credit scores aren't just used by banks. Increasingly, insurance firms, landlords and even employers are using credit scores as a proxy for figuring out how responsible you are. The more responsible you seem based on your score, the more likely they'll trust you.

This is a new rating system created by Loan Dilly. The Merit Score™ metric ranges from 100 to 770. On this scale, the higher the number, the better. In general, anything over 550 is considered good and show you in a good light. It may even help you get better rates: if your score is below 450, you can't even apply for a loan request on Loan Dilly. If it's near 450 you will end up paying very high rates on loans if any Lender even accepts you.

Your Merit Score™ is generated based on the information in your Borrower profile on Loan Dilly. Certain items provide a higher boost to your score than others. As time goes on Loan Dilly will get better and better at refining the Merit Score™ metric so that if you provide a more detailed outline of your debt, expenses, income, assets, etc, your score will carry more weight.

The most important factor in determining your Merit Score™, payment history, is simply a record of whether you've paid your bills on time. The second more important, amount owed, is a record of your outstanding debts. Lenders believe that borrowers who are close to maxing out their credit are more likely to miss payments. The third factor, length of history, is determined by the average age of your accounts, as well as how long it’s been since those accounts were used. Another factor is whether you’ve got a mix of different types of credit (such as a mortgage, student loan and car loan). Lenders like to know that you can manage different kinds of accounts responsibly.