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FICO & D&B Rating Models Flashcards

7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 FICO & D&B Rating Models flashcards as text

  1. A D&B PAYDEX score of 100 means a company typically pays:

    Answer: 30 days early

    A PAYDEX score of 100 reflects payment 30 days ahead of agreed terms, the highest possible rating.

  2. In credit risk analysis, FICO's 'Industry Option' scores differ from base FICO scores because they:

    Answer: Are calibrated to predict delinquency for a specific lending segment (e.g., auto, bankcard)

    FICO Industry Option scores are tailored to specific credit verticals such as auto loans or bankcards, making them more predictive for those segments.

  3. What is the primary purpose of the D&B D-U-N-S Number in relation to credit scoring?

    Answer: It serves as a unique identifier linking a business's credit file across D&B's global database

    The D-U-N-S Number is a unique nine-digit identifier assigned by D&B to link all credit and payment data for a specific business entity.

  4. Under the FICO model, how long does a Chapter 7 bankruptcy remain on a consumer's credit report?

    Answer: 10 years

    A Chapter 7 bankruptcy remains on a consumer's credit report for 10 years from the filing date.

  5. The D&B Credit Score Risk Class 1 signifies:

    Answer: Low risk — minimal likelihood of severe delinquency

    D&B Credit Score Risk Class 1 indicates the lowest risk, meaning the business is unlikely to become severely delinquent.

  6. A credit professional notices that a new business applicant has a D&B file showing only public record data and no trade payment experiences. The best next step is to:

    Answer: Request trade references and supplier payment histories directly from the applicant

    When trade payment data is absent, requesting direct trade references from the applicant allows the creditor to supplement D&B data for a more complete credit assessment.

  7. Which statement about FICO score 'inquiries' is accurate for rate-shopping scenarios?

    Answer: Multiple mortgage inquiries within a 45-day window are treated as a single inquiry

    FICO models recognize rate-shopping by treating multiple inquiries for mortgages, auto loans, or student loans within a 45-day window as one inquiry.