CCP FICO & D&B Rating Models 3 — Questions and Answers
Question 1: Under FICO Score 9, which change was made compared to FICO Score 8 regarding medical debt?
- Medical debt is weighted more heavily than other collections
- Paid medical collections no longer negatively impact the score (Correct answer)
- Medical debt is excluded from scoring entirely
- Medical debt extends the score calculation window to 10 years
Correct answer: Paid medical collections no longer negatively impact the score
FICO Score 9 reduces the negative impact of medical collections and ignores paid medical collection accounts.
Question 2: A business has no D&B PAYDEX score. What is the most likely reason?
- The business has an excellent payment history
- D&B has fewer than 3 payment experiences on file (Correct answer)
- The company operates in a low-risk industry
- The business is publicly traded
Correct answer: D&B has fewer than 3 payment experiences on file
D&B requires a minimum of three payment experiences reported by trade references to generate a PAYDEX score.
Question 3: Which of the following best describes the D&B Delinquency Predictor Score?
- Predicts likelihood of severely delinquent payment over the next 12 months (Correct answer)
- Measures how frequently a company changes payment terms
- Scores a business's ability to obtain new lines of credit
- Rates a company's industry-specific default risk only
Correct answer: Predicts likelihood of severely delinquent payment over the next 12 months
The D&B Delinquency Predictor Score forecasts the probability that a business will become severely delinquent on payments within 12 months.
Question 4: FICO Score 10T introduced 'trended data.' What does trended data capture?
- A snapshot of balances at one point in time
- The directional movement of balances and payments over 24 months (Correct answer)
- Income changes reported to credit bureaus
- Geographic shifts in a consumer's credit usage
Correct answer: The directional movement of balances and payments over 24 months
Trended data shows whether balances are rising or falling over the past 24 months, distinguishing transactors from revolvers.
Question 5: When a creditor performs a 'soft inquiry' on a FICO score, what is the impact?
- The score drops by up to 5 points
- The score drops by up to 10 points
- There is no impact on the FICO score (Correct answer)
- The score improves if the inquiry is for a credit limit increase
Correct answer: There is no impact on the FICO score
Soft inquiries — such as pre-approval checks or account monitoring — do not affect the FICO score in any way.
Question 6: D&B's Maximum Credit Recommendation is best described as:
- The highest credit score a business has ever achieved
- A suggested dollar ceiling for credit extended to a business (Correct answer)
- The total credit a business currently carries
- An industry benchmark for average trade credit terms
Correct answer: A suggested dollar ceiling for credit extended to a business
D&B's Maximum Credit Recommendation is a suggested upper limit on the dollar amount of credit a creditor should extend to a given business.
Question 7: Which action would most directly improve a consumer's FICO 'amounts owed' category?
- Opening several new credit accounts
- Disputing negative items on the credit report
- Paying down revolving credit card balances (Correct answer)
- Closing oldest credit accounts to simplify credit profile
Correct answer: Paying down revolving credit card balances
Reducing revolving balances lowers credit utilization, which is the primary driver of the 'amounts owed' FICO category.
CCP FICO & D&B Rating Models 3
Under FICO Score 9, which change was made compared to FICO Score 8 regarding medical debt?