Credit Scoring System Quiz

What are the factors that can affect your credit score?

• Your parents' reputation

• Payment history, credit utilization, length of credit history, new credit inquiries, and types of credit used.

• The number of wife/husband you have

• All are correct

Explain the importance of the credit scoring system in the financial industry.

• The credit scoring system is important in the financial industry as it helps borrowers decide what to have for lunch.

• The credit scoring system is important in the financial industry as it helps central bank determine the money supply for the next week.

• The credit scoring system is important in the financial industry as it helps lenders choose the best product for customer.

• The credit scoring system is important in the financial industry as it helps lenders assess the creditworthiness of borrowers, determine the interest rates for loans, and manage the risk of lending money.

What are some common credit scoring algorithms used by lenders?

• FICO Score, CIC

• SAT Score

• BMI Score

• IQ Score

How does the number of credit inquiries impact your credit score?

• The number of credit inquiries has no impact on your credit score

• The number of credit inquiries can have a positive impact on your credit score

• The number of credit inquiries only impacts your credit score if they are from different lenders

• The number of credit inquiries can have a negative impact on your credit score, as it may indicate that you are seeking credit frequently, which can be seen as a risk by lenders.

What is the role of payment history in determining a credit score?

• Payment history plays a significant role in determining a credit score as it reflects an individual's track record of making timely payments on their debts.

• Credit score is only affected by the amount of debt owed

• Credit score is determined solely by income level

• Payment history has no impact on credit score

Discuss the significance of credit utilization in credit scoring.

• A higher credit utilization ratio is always better for credit scores

• Credit utilization only matters for new credit applications

• Credit utilization has no impact on credit scoring

• Credit utilization is an important factor in credit scoring as it measures the amount of available credit being used. A lower credit utilization ratio is generally seen as positive and can improve credit scores, while a higher ratio can negatively impact scores.

What are some strategies to improve a low credit score?

• Maxing out credit cards

• Ignoring bills and payments

• Opening multiple new credit accounts

• Paying bills on time, reducing credit card balances, checking for errors on credit reports, and avoiding opening new credit accounts unnecessarily.

How does the length of credit history affect your credit score?

• The length of credit history can negatively affect your credit score

• The length of credit history is only important for mortgage applications

• The length of credit history can positively affect your credit score, as it demonstrates a longer track record of responsible credit management.

• The length of credit history has no impact on your credit score

What is exclude in FICO system?

• Payment history

• Amount owned

• New credit

• Ethnic back

What is include in FICO system?

• Religion

• Gender

• Length of credit history

• Marital status