FiCEP Credit Reports and Scoring 4

Question 1

A client notices a collection account on their credit report that was paid in full two years ago but still shows as 'unpaid.' What is the best course of action?

Accepted Answer

Dispute the inaccuracy with the credit bureau in writing

Answer

Under the FCRA, consumers have the right to dispute inaccurate information with credit bureaus, which must investigate within 30 days.

Question 2

Which FICO score range is generally considered 'good' credit by most lenders?

Accepted Answer

670–739

Answer

FICO scores of 670–739 are classified as 'good,' while 740–799 is 'very good' and 800+ is 'exceptional.'

Question 3

A client's credit report shows a charged-off account. How long can this negative item typically remain on a credit report?

Accepted Answer

7 years from the date of first delinquency

Answer

Most negative items, including charge-offs, can remain on a credit report for 7 years from the date of first delinquency leading to the charge-off.

Question 4

Under the VantageScore 3.0 model, which factor carries the MOST weight in calculating the score?

Accepted Answer

Payment history

Answer

In VantageScore 3.0, payment history is the most influential factor, classified as 'extremely influential.'

Question 5

A client applies for a mortgage and the lender pulls all three credit bureau scores. Which score is typically used for underwriting decisions?

Accepted Answer

The middle score among the three bureaus

Answer

Mortgage lenders typically use the middle score from the three major credit bureaus (Experian, Equifax, TransUnion) for underwriting decisions.

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP Credit Reports and Scoring 4