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
Which of the following is NOT one of the three major consumer credit reporting agencies (CRAs) in the United States?
Answer: ChexSystems
ChexSystems is a specialty consumer reporting agency focused on banking history, not one of the three major credit bureaus (Equifax, Experian, TransUnion).
When evaluating a guarantor for a lease, the most important financial threshold to confirm is that the guarantor's income typically meets:
Answer: A higher income multiplier, often 4x to 5x monthly rent
Guarantors are held to a higher income standard—commonly 4x to 5x monthly rent—because they must be capable of covering the resident's obligation if needed.
A 'judgment' appearing on an applicant's credit report is significant because it:
Answer: Represents a court order confirming a legal debt obligation
A civil judgment is a court-ordered confirmation that the consumer owes a debt, which can be enforced through wage garnishment or liens.
In a financial analysis for leasing purposes, 'gross income' refers to:
Answer: Total income earned before taxes and deductions
Gross income is the total income before any deductions, and it is the standard baseline used in rental income-to-rent ratio calculations.
Which of the following scenarios would most likely trigger an Equal Credit Opportunity Act (ECOA) concern during the rental application process?
Answer: Applying a lower income multiplier requirement only to applicants of a specific national origin
Applying different financial criteria based on a protected class characteristic such as national origin violates ECOA's prohibition on credit discrimination.
A property uses a scoring model that assigns points for income, credit score, rental history, and employment stability. This approach is best described as:
Answer: A criterion-based or points-based screening matrix
A points-based or criterion-based screening matrix applies objective, weighted criteria to each applicant, promoting consistency and defensibility.
When a leasing professional reviews a credit report and sees 'Account in Collections – Balance: $0', this most likely means:
Answer: The collection balance was paid or settled, but the account record remains
A $0 balance on a collection indicates the debt was resolved (paid or settled), though the derogatory account history may remain on the report.