Exploring Credit Concepts in W!SE Review Pt 3

The video tutorial focuses on creditworthiness, explaining the three C's: character, capacity, and collateral. It delves into how credit scores, particularly FICO scores, are calculated and their impact on loan interest rates. The tutorial highlights factors affecting FICO scores, such as payment history and debt levels, and offers tips for improving credit scores. It also discusses the importance of capacity and collateral in determining creditworthiness.

What are the three C's of credit worthiness?

• Character, Credit, Collateral

• Character, Capacity, Collateral

• Credit, Capacity, Collateral

• Character, Capacity, Credit

What does a FICO score represent?

• A measure of investment potential

• A measure of credit worthiness

• A measure of saving habits

• A measure of financial stability

Which organizations maintain credit history databases?

• FICO, Experian, TransUnion

• Equifax, FICO, Experian

• Equifax, TransUnion, FICO

• Equifax, TransUnion, Experian

How do lenders use credit scores to determine loan conditions?

• To decide interest rates and loan approval

• To evaluate financial advice suitability

• To determine repayment periods

• To assess investment strategies

What is the impact of high credit scores on interest rates?

• No impact on interest rates

• Variable interest rates

• Lower interest rates

• Higher interest rates

What major factor negatively impacts your credit score?

• Timely bill payments

• Regular credit inquiries

• High unpaid balances

• Low credit utilization

What should you do to improve your credit score?

• Apply for multiple loans

• Pay your bills on time

• Max out your credit cards

• Increase your debt

What is the effect of late payments on your credit score?

• Has no effect

• Reduces credit score

• Increases credit limit

• Improves credit score

What does 'capacity' in credit worthiness refer to?

• Your ability to repay the debt

• Your financial investment skills

• Your ability to secure loans

• Your total credit limit

How does collateral affect your loan terms?

• Has no effect on the loan

• Shortens the loan term

• Increases the loan amount

• Reduces the interest rate