Credit and Financial Analysis Flashcards
7 cards from real CLP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Credit and Financial Analysis flashcards as text
A prospective resident's debt-to-income (DTI) ratio is 42%. Most CLP-standard underwriting guidelines consider this applicant:
Answer: A marginal risk requiring additional scrutiny or a co-signer
A DTI above 40% is generally considered elevated; most properties flag it for additional review rather than automatic denial.
Which component of a credit report reflects the proportion of revolving credit balances to credit limits?
Answer: Credit utilization ratio
Credit utilization ratio compares current revolving balances to total available revolving credit limits.
When verifying employment income for a self-employed applicant, the most reliable documents to request are:
Answer: Two years of signed federal tax returns and a current bank statement
Self-employed income is best verified through IRS-filed tax returns (showing net income) and recent bank statements for cash-flow confirmation.
A charge-off on a credit report indicates that:
Answer: The creditor wrote the debt off as a loss after prolonged non-payment
A charge-off means the original creditor declared the debt uncollectible after typically 180 days of delinquency.
Under the Fair Credit Reporting Act (FCRA), most negative credit information can remain on a consumer credit report for up to:
Answer: 7 years
The FCRA limits most adverse items—including late payments, collections, and charge-offs—to seven years on a credit report.
An applicant submits bank statements showing consistent monthly deposits of $4,000, but their stated income on the application is $6,500 per month. A leasing professional should:
Answer: Request additional income documentation to reconcile the discrepancy
Discrepancies between stated income and verifiable deposits require additional documentation before a credit decision is made.
Which of the following best describes 'net effective rent' in the context of lease financial analysis?
Answer: The average monthly rent after spreading concessions over the lease term
Net effective rent is calculated by amortizing any concessions (e.g., free months) across the full lease term to yield the true average monthly cost.