CLP Credit and Financial Analysis 2

Question 1

A prospective resident's debt-to-income (DTI) ratio is 42%. Most CLP-standard underwriting guidelines consider this applicant:

Accepted Answer

A marginal risk requiring additional scrutiny or a co-signer

Answer

A DTI above 40% is generally considered elevated; most properties flag it for additional review rather than automatic denial.

Question 2

Which component of a credit report reflects the proportion of revolving credit balances to credit limits?

Accepted Answer

Credit utilization ratio

Answer

Credit utilization ratio compares current revolving balances to total available revolving credit limits.

Question 3

When verifying employment income for a self-employed applicant, the most reliable documents to request are:

Accepted Answer

Two years of signed federal tax returns and a current bank statement

Answer

Self-employed income is best verified through IRS-filed tax returns (showing net income) and recent bank statements for cash-flow confirmation.

Question 4

A charge-off on a credit report indicates that:

Accepted Answer

The creditor wrote the debt off as a loss after prolonged non-payment

Answer

A charge-off means the original creditor declared the debt uncollectible after typically 180 days of delinquency.

Question 5

Under the Fair Credit Reporting Act (FCRA), most negative credit information can remain on a consumer credit report for up to:

Accepted Answer

7 years

Answer

The FCRA limits most adverse items—including late payments, collections, and charge-offs—to seven years on a credit report.

(CLP) Certified Leasing Professional Practice Test