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 co-applicant with excellent credit is added to a lease application where the primary applicant has poor credit. The leasing professional should evaluate the co-applicant's financials:
Answer: As a combined household profile, applying the same criteria as any applicant
Co-applicants are evaluated as a combined financial unit, and the same qualifying criteria apply to the household as a whole.
Which of the following best explains why a leasing professional should use a written, documented screening criteria policy?
Answer: Documented criteria demonstrate consistent, defensible decision-making and reduce Fair Housing risk
Written screening criteria provide a consistent, objective baseline that demonstrates non-discriminatory decision-making if a Fair Housing complaint arises.
A prospective tenant's credit report shows no credit history at all. The appropriate response under a sound credit policy is to:
Answer: Evaluate through alternative verification methods such as rental history, utility payment records, or a co-signer
A 'thin file' or no credit history is not inherently negative; alternative documentation and rental history can substitute for traditional credit data.
The capitalization rate (cap rate) of a rental property is calculated as:
Answer: Net Operating Income ÷ Property Value (or Purchase Price)
Cap rate = Net Operating Income ÷ Current Market Value, and it measures the unlevered return rate of an income-producing property.
When a prior landlord reference reveals that an applicant consistently paid rent 10–15 days late but never missed a payment, a leasing professional should:
Answer: Weigh this pattern as a moderate risk indicator alongside other financial factors
Chronic lateness is a behavioral risk signal worth factoring into the overall credit assessment, even if no eviction or balance is owed.
Phantom income in the context of multifamily financial statements refers to:
Answer: Income reported on paper that does not represent actual cash collected (e.g., uncollected rents counted as income)
Phantom income is revenue recorded on financial statements that has not actually been collected, which can distort a property's true financial performance.
Under the FCRA, if an applicant disputes information in their credit report used to deny their rental application, the credit bureau must investigate and respond within:
Answer: 30 days (or 45 days if additional information is submitted)
The FCRA requires credit bureaus to complete a dispute investigation within 30 days, extendable to 45 days if the consumer provides additional supporting documentation.