CCM Credit Scoring & Rating Systems

Question 1

What is the numerical range of FICO credit scores?

Accepted Answer

300–850

Answer

100–500

Answer

0–999

Answer

250–900

Question 2

What is the Altman Z-Score model primarily used to predict?

Accepted Answer

The probability of corporate bankruptcy within two years

Answer

A company's future stock price movement

Answer

The creditworthiness of individual consumers

Answer

A company's projected revenue growth

Question 3

Which factor carries the greatest weight in calculating a FICO credit score?

Accepted Answer

Payment history

Answer

Length of credit history

Answer

Types of credit used

Answer

New credit inquiries

Question 4

Dun & Bradstreet's PAYDEX score for business credit ranges from:

Accepted Answer

1 to 100

Answer

300 to 850

Answer

0 to 999

Answer

1 to 10

Question 5

What is the primary purpose of a credit scoring model in commercial credit management?

Accepted Answer

To objectively quantify and rank the risk of extending credit to a customer

Answer

To automate accounts payable processing

Answer

To determine the fair market value of a company

Answer

To calculate the appropriate interest rate on revolving credit facilities

Question 6

In the Altman Z-Score model, a score above 3.0 places a company in which zone?

Accepted Answer

The safe zone, indicating low bankruptcy probability

Answer

The distress zone, indicating high bankruptcy probability

Answer

The grey zone, requiring further analysis

Answer

The default zone, indicating imminent insolvency

Question 7

Which of the following is NOT one of the three major U.S. consumer credit bureaus?

Accepted Answer

Dun & Bradstreet

Answer

Equifax

Answer

TransUnion

Answer

Experian