WorksheetsIntroduction to Credit Scores
Total questions: 20
Worksheet time: 10mins
Before modern credit scoring, which situation most accurately describes how lenders evaluated borrowers?
A national formula calculated risk for every borrower
Each lender used personal judgment to assess applicants
Government agencies set identical rules for all loans
Banks relied solely on applicants’ income statements
Which statement best describes the primary purpose of a credit score for lenders?
Predict repayment behavior and risk level
Identify personal income and employment history
Set government-mandated interest rate caps
Track savings account deposits and balances
Which organization originally developed the widely used FICO credit score model?
Equifax Corporation in 1989
TransUnion Corporation in 1989
Fair Isaac Corporation in 1989
Experian Corporation in 1989
Why might an individual's FICO score show different numbers when checked with Equifax, TransUnion, and Experian?
Scores cannot vary between bureaus
FICO is calculated only by lenders
Each bureau applies its own scoring formula
Each bureau uses identical data inputs
Match each term to its best description.
FICO Score
Widely used credit score model in North America
Fair Isaac Corporation
Company that introduced the score in 1989
Credit bureau
Organization that compiles credit data for scoring
Using the diagram showing score categories across the 300–850 arc, which score range most likely corresponds to lower interest rates on approved loans?
Poor range near 300–580
Good range around 670–740
Fair range near 580–670
Very Good to Exceptional around 740–850
Match each score category to the most likely lending outcome shown in the diagrams.
Poor
High denial risk, highest rates
Fair
Possible approval, higher rates
Good
Likely approval, moderate rates
Very Good
Strong approval odds, lower rates
Using the diagram, which score range is most likely to be approved for a loan but with higher interest rates?
Good range near 670–740
Very good range at 740–800
Exceptional range at 800–850
Fair range around 580–670
A borrower’s score increased from 735 to 810. Based on the diagrams, how does this change affect likely loan terms?
Remains in good; approval at higher interest rates
Stays very good; best rates rarely available
Drops to fair; limited approval and higher rates
Moves into exceptional; access to best interest rates
Which life area is directly affected by credit score and shown in the visual with a key icon?
Purchasing groceries
Renting an apartment
Opening a savings account
Buying a vacation home
Match each icon with the life area it represents.
Key icon
Renting an Apartment
Graduation cap icon
Student Loans
Steering wheel icon
Car Payments
Briefcase icon
Job Applications
A teen with a strong credit score applies for several opportunities. Which outcome is most likely?
Fewer job interviews
Higher student loan rates
Easier apartment approval
More expensive car payments
Which factor carries the greatest weight in a FICO credit score according to the diagram?
New credit at ten percent
Length of credit at fifteen percent
Payment history at thirty-five percent
Capacity at thirty percent
Match each FICO factor with its percentage weight shown in the diagram.
Payment history
35%
Capacity
30%
Length of credit
15%
New credit
10%
A borrower improves one area by making all payments on time. Based on the visual, which specific factor is directly improved and what percent of the score does it influence?
Length of credit — fifteen percent
Mix of credit — ten percent
Capacity — thirty percent
Payment history — thirty-five percent
Which action best supports a strong credit score regarding capacity (credit utilization)?
Using nearly all available credit each month
Keeping balances well below credit limits
Closing cards to hide high balances
Rotating balances across multiple cards
Match each credit factor to its impact on your credit score.
Length of credit
Long positive history improves score
New credit
Opening many accounts quickly hurts score
Credit mix
Having both revolving and installment helps
A student has two credit cards totaling 2,000inlimitsandcarries 1,600 in balances. What is their utilization and likely impact?
Utilization 20%, likely neutral effect
Utilization 40%, likely improves score
Utilization 80%, likely harms score
Utilization 100%, likely improves score
Aiming to improve your credit score, which plan best uses credit mix and monitoring available to consumers?
Maintain a credit card and a car loan, monitor reports
Use two credit cards and ignore installment loans
Open one credit card and check reports weekly
Apply for many cards and skip report checks
Close all accounts and request reports yearly
Which practice helps you consistently monitor credit throughout the year, as shown in the image with seasonal calendars?
Check credit once at random during the year
Request monthly paper reports from all bureaus
Set seasonal calendar reminders for quarterly checks
Only review statements when a problem appears
