Credit Score Vocabulary Words and Definitions

What is a Credit Score and what is its typical range?

• A numerical expression representing creditworthiness, typically ranging from 300 to 850

• A measure of financial income, typically ranging from $0 to $100,000

• A type of bank account, typically ranging from 1% to 5% interest

• A government-issued identification number, typically ranging from 1000 to 9999

What is a Credit Bureau and name some examples?

• A financial institution that provides loans

• An agency that collects and maintains individual credit information

• A government body that regulates financial markets

• A company that offers investment advice

A FICO Score is a type of credit score. Who developed it?

• Experian

• Equifax

• TransUnion

• Fair Isaac Corporation

VantageScore is a credit scoring model. How does it differ from FICO?

• VantageScore is used by more lenders than FICO.

• VantageScore uses a different scoring range than FICO.

• VantageScore is older than FICO.

• VantageScore is only used in the United States.

Who is a Lender in financial terms?

• A person or organization that borrows money

• A person or organization that lends money

• A person or organization that manages investments

• A person or organization that insures assets

Payment History affects a credit score by:

• Being the most significant factor in determining the score

• Having no impact on the score

• Being less important than the amount owed

• Only affecting the score if payments are missed

Credit Utilization is the ratio of your credit card balance to your credit limit. What percentage is ideal?

• 10%

• 30%

• 50%

• 70%

What is Length of Credit History and how does it affect credit scores?

• Length of Credit History is the duration of time a credit account has been active, and it affects credit scores by contributing to 15% of the total score.

• Length of Credit History is the number of credit accounts a person has, and it affects credit scores by contributing to 30% of the total score.

• Length of Credit History is the amount of credit used by a person, and it affects credit scores by contributing to 10% of the total score.

• Length of Credit History is the frequency of credit inquiries, and it affects credit scores by contributing to 20% of the total score.

What is New Credit and what does it include?

• A new line of credit and its components

• A type of loan

• A credit score

• A financial institution

Credit Mix includes different types of credit accounts. Which of the following is NOT typically included in a Credit Mix?

• Credit cards

• Mortgages

• Utility bills

• Auto loans