Questions and Answers
You only have one credit score called your FICO.
False
FICO stands for Federal Insurance and Credit Operations.
False
Types of credit used accounts for 10% of your credit score.
True
800 is the highest FICO score.
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Having better credit should save you money on the principal of loans.
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Defaulting on child support payments can impact your credit.
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The lower your score, the lower the risk is to lenders.
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Your FICO score determines whether or not you are a 'good' customer.
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Barry is married; this will impact his credit score.
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Your FICO score changes over time.
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Credit Bureau scores are the only scores used.
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Being unemployed impacts your credit score at all three agencies.
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Your score is the same at the three credit reporting agencies.
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Bob is 18; this will impact his credit score.
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Barbie lives in South Central Los Angeles; this will impact her credit score.
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There are four main credit reporting agencies; one of them is Beacon.
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The higher your credit score, the less you can expect to pay for your loan.
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Consumer-related inquiries do not impact your credit score.
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The severity of delinquency, how long past due, matters.
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Adverse public records can impact your credit score.
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Amounts owed makes up the largest percentage of your credit score.
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Promotional inquiries do not impact your credit score.
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Payment history makes up a majority of your credit score.
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The lowest your credit score can be is 300.
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One part of your credit score includes nude credit.
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Nigel is purple; this will not impact his credit score.
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Equifax is a credit reporting agency.
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Number of past items due does not impact your credit score.
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No one piece of information or factor will determine your credit score.
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Leslie is a Chinese Jew; this will impact her credit.
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Because of credit scores, people can get loans faster and credit decisions are more fair.
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One piece of information can hurt your credit score.
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Child support payments (ordered by a judge) are part of your credit score.
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FICO stands for Fair Isaac and Company.
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No one has a FICO score over 800 or below 350.
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No one has a FICO score over 850 or below 200.
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The amount of money you owe and the number of accounts with balances affect your score.
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The three main credit reporting agencies are Equifax, Experian, and TransUnion.
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FICO scores are the only credit bureau scores when it comes to credit.
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Credit scores have no impact on how fast you get a loan.
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No one piece of information or factor alone will determine your score.
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You have one FICO score where the report must contain at least one account that updated in the past six months.
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The severity of delinquency (how much owed) matters.
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Bob is 18; this might impact his ability to get a loan.
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Payment history and length of credit history make up a majority of your credit score.
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Study Notes
Credit Score Myths and Facts
- Individuals have multiple credit scores, not just a single FICO score.
- FICO refers to Fair Isaac and Company, not Federal insurance and Credit Operations.
Credit Score Components
- The types of credit used contribute to 10% of your FICO score.
- Payment history is crucial for determining credit scores but does not exclusively dominate the score.
- Amounts owed do not make up the largest percentage of a credit score.
Financial Behavior Impact
- Defaulting on child support payments can negatively impact credit.
- Consumer-related inquiries, such as checking your own credit, do not affect scores.
- The number of past due items influences your credit score.
Score Ranges and Changes
- FICO scores range from 300 to 850, contrary to the belief that the maximum is 800 or the minimum is 350.
- The lowest possible credit score is 300, while scores can reach up to 850.
- FICO scores can fluctuate over time based on individual financial behaviors.
Reporting Agencies
- The three main credit reporting agencies are Equifax, Experian, and TransUnion; there are not four major agencies.
- Equifax is confirmed as a credit reporting agency.
Characteristics of Scoring
- No single piece of information determines credit scores; it's a combination of factors.
- The severity and duration of delinquency, along with past due amounts, impact scores.
Miscellaneous Facts
- Personal attributes such as marital status, job occupation, or race do not impact credit scores.
- Child support payments ordered by a judge are not used to calculate credit scores.
- Under government laws, naming a dog "FICO" could misrepresent credit-related services.
General Understanding of Credit
- Better credit should theoretically lead to savings on interest for loans, though it does not lower the principal owed.
- Credit scores influence the speed at which loans can be obtained and aim to promote fairness in lending decisions.
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Description
Test your knowledge on FICO credit scores with this set of flashcards. Each card presents a statement related to FICO, challenging what you know about credit scoring. The quiz helps clarify common misconceptions and facts regarding your credit score.