Credit Score Quiz

What is a FICO score?

• A three-digit number that indicates a person's creditworthiness

• A mathematical model used by lenders to measure a borrower's risk

• A credit reporting bureau that adopted the FICO score formula

• A data analytics firm that created the first industry-standard algorithm

What does a high credit score indicate to a lender?

• The borrower is financially responsible

• The borrower lives paycheck to paycheck

• The borrower has a low credit limit

• The borrower has a high debt-to-credit ratio

Which factor has the largest percentage in calculating a FICO score?

• Credit to debt ratio

• Length of credit history

• Payment history

• Credit diversity

What is the recommended credit to debt ratio to maintain a good score?

• Under 25%

• Over 75%

• It doesn't matter as long as payments are made on time

• Exactly 50%

What makes up 15% of a FICO score?

• Payment history

• Length of credit history

• New lines of credit and credit checks

• Credit diversity

What is the purpose of credit diversity in a credit report?

• To have a mix of different types of credit

• To have a high number of credit cards

• To have a high number of mortgages

• To have a high number of installment loans

What can be a red flag in terms of new lines of credit and credit checks?

• Applying for multiple credit cards in a short period of time

• Having multiple lenders check your credit score

• Having insurance companies or employers check your credit score

• Shopping for a car loan or mortgage

How often can you get a free credit report from the big three credit bureaus?

• Once a year

• Once every month

• Once every six months

• Once every three months

What is the main way a FICO score is calculated?

• Using the borrower's credit to debt ratio

• Using the FICO model

• Using the Equifax, Experian, and Transunion models

• Using the borrower's payment history

What is the key to maintaining a good borrowing reputation?

• Borrowing a lot and paying it back slowly

• Borrowing from multiple lenders and paying it back on time

• Borrowing as little as possible and paying it back on time

• Borrowing from friends and family instead of lenders