Understanding Credit Scores and Financial Impact Quiz
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Questions and Answers

What is the most important factor in determining a credit score?

  • Types of credit
  • Payment history (correct)
  • Length of credit history
  • New credit

    • What is the typical range for an excellent credit score?

  • 800-850 (correct)
  • 600-700
  • 700-800
  • 850-900

    • How does a higher credit score benefit a borrower?

  • Lenders are more likely to approve you for loans (correct)
  • Lenders are more likely to decline your loan applications
  • You can get better interest rates
  • Both a and b

    • What is the second most important factor in determining a credit score?

    <p>Amounts owed</p> Signup and view all the answers

    Which credit reporting agency is not mentioned in the text?

    <p>Fitch</p> Signup and view all the answers

    Why are longer credit histories considered less risky?

    <p>Because they demonstrate you can manage various types of credit.</p> Signup and view all the answers

    What is the potential impact of having too many recent applications for credit?

    <p>It can lower your credit score.</p> Signup and view all the answers

    Why should you avoid closing credit cards that you do not use?

    <p>Closing them can lower your credit score.</p> Signup and view all the answers

    What is the main difference between FICO Score and VantageScore?

    <p>FICO Score uses only information from one credit bureau.</p> Signup and view all the answers

    Why was VantageScore developed as an alternative to FICO Score?

    <p>To provide a single, tri-bureau score using information from all three bureaus.</p> Signup and view all the answers

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