Credit Reports and Scoring Flashcards
6 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 6 Credit Reports and Scoring flashcards as text
Which factor has the greatest impact on a FICO credit score?
Answer: Payment history
Payment history accounts for approximately 35% of a FICO score, making it the most influential factor.
A client has a credit utilization ratio of 78%. What does this indicate?
Answer: They are using too much available credit; target is below 30%
A 78% utilization ratio is considered high. The recommended target is below 30%, with below 10% being ideal.
How long does a Chapter 7 bankruptcy remain on a credit report?
Answer: 10 years
A Chapter 7 bankruptcy stays on credit reports for 10 years from the filing date.
What is the difference between a hard inquiry and a soft inquiry on a credit report?
Answer: Hard inquiries occur when applying for credit and can lower scores; soft inquiries do not affect scores
Hard inquiries result from credit applications and may lower scores by a few points; soft inquiries do not affect scores.
A client finds an unfamiliar account on their credit report. What should the counselor recommend?
Answer: File a dispute with all three bureaus, place a fraud alert, and consider a credit freeze
Unknown accounts may indicate identity theft and require disputes, fraud alerts, and potentially a credit freeze.
Which credit score range is generally considered 'good' by most lenders?
Answer: 670-739
A FICO score of 670-739 is classified as 'good,' qualifying borrowers for favorable terms on most credit products.