Credit Reports and Scoring Flashcards
7 cards from real FICEP 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 Reports and Scoring flashcards as text
A client wants to build credit from scratch. Which option is MOST appropriate for someone with no credit history?
Answer: Open a secured credit card
A secured credit card requires a cash deposit as collateral, making it accessible for people with no credit history while helping build a positive payment record.
Which federal law gives consumers the right to obtain one free credit report from each bureau annually?
Answer: Fair and Accurate Credit Transactions Act (FACTA)
FACTA amended the FCRA to require the three major credit bureaus to provide consumers one free credit report per year via AnnualCreditReport.com.
A client is 60 days past due on a credit card. How will this likely affect their FICO score compared to a 30-day late payment?
Answer: A 60-day late payment has a significantly greater negative impact
The severity of late payment derogatory marks increases with the number of days past due; a 60-day late is more damaging than a 30-day late.
What is the primary difference between a credit report and a credit score?
Answer: A credit report is a detailed history of credit activity; a credit score is a numerical summary derived from that data
A credit report is a detailed record of a consumer's credit history, while a credit score is a three-digit number calculated using data from the credit report.
A client with multiple unpaid medical collections learns that FICO Score 9 treats medical debt differently. What is the key difference?
Answer: FICO Score 9 ignores paid medical collections and gives less weight to unpaid ones
FICO Score 9 ignores paid medical collection accounts and gives less weight to unpaid medical collections compared to other types of unpaid collections.
A financial counselor advises a client to 'piggyback' on a family member's credit card. What credit-building technique does this describe?
Answer: Being added as an authorized user on an established account
Being added as an authorized user allows the positive payment history and credit limit of the primary cardholder's account to appear on the authorized user's credit report.
Under the FCRA, how long does a credit bureau have to investigate a consumer's dispute after it is received?
Answer: 30 days
The FCRA requires credit bureaus to complete their investigation of a dispute generally within 30 days (extendable to 45 days if the consumer submits additional information).