Credit Score Flashcard

Front

What is a credit score?

Back

A credit score is a numerical representation of a person's creditworthiness, based on their credit history and financial behavior.

Front

Why do lenders check credit history when applying for a loan?

Back

Lenders check credit history to assess the risk of lending money to an individual, as it reflects their ability to repay debts.

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What does FICO stand for?

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FICO stands for Fair Isaac Corporation, which developed the most widely used credit scoring model.

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How can late bill payments affect your credit score?

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Late bill payments can negatively impact your credit score by indicating to lenders that you may be unreliable in repaying debts.

Tags

CCSS.RI.11-12.4

CCSS.RI.7.4

CCSS.RI.8.4

CCSS.RI.9-10.4

CCSS.RI.9-10.4

Front

Can landlords report unpaid rent to credit agencies?

Back

Yes, landlords can report unpaid rent to credit reporting agencies, which can affect a tenant's credit score.

Front

What is the impact of a low credit score on borrowing?

Back

A low credit score can lead to higher interest rates, loan denials, or less favorable loan terms.

Front

What factors influence a credit score?

Back

Factors include payment history, credit utilization, length of credit history, types of credit used, and recent credit inquiries.

Front

What is credit utilization?

Back

Credit utilization is the ratio of current credit card balances to credit limits, indicating how much of available credit is being used.

Front

How often should you check your credit report?

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You should check your credit report at least once a year to ensure accuracy and to monitor for any fraudulent activity.

Front

What is a credit reporting agency?

Back

A credit reporting agency is a company that collects and maintains consumer credit information and sells it to lenders.