Credit & Account Management Flashcards

What is the primary benefit of behavioral scoring in ongoing account management?

Answer: It predicts an existing customer's likelihood of future delinquency from account activity

Behavioral scores use payment patterns and utilization on existing accounts to forecast risk and prioritize treatment.

A customer returns damaged goods after being invoiced. Which document is typically issued to reduce the amount they owe?

Answer: Credit memo

A credit memo reduces the customer's receivable balance for returns, allowances, or billing errors.

What does "unapplied cash" mean in accounts receivable?

Answer: Payments received that have not been matched to specific invoices

Unapplied cash is payment posted to an account but not yet matched to open items, which distorts aging until resolved.

When an account is placed on credit hold, what typically happens?

Answer: New orders are not released until past-due issues are resolved

A credit hold stops new shipments or credit extensions until the customer cures the delinquency or over-limit balance.

Under the CARD Act amendments to Regulation Z, credit card periodic statements must be delivered at least how many days before the payment due date?

Answer: 21 days

Card issuers must mail or deliver statements at least 21 days before the payment due date.

Under FFIEC guidance, before re-aging an open-end account, the borrower should have made at least how many consecutive minimum monthly payments?

Answer: Three

FFIEC requires three consecutive minimum payments, an account at least nine months old, and limits on re-age frequency.

Under the FCRA, a furnisher that receives a qualifying direct dispute from a consumer must generally complete its investigation within how many days?

Answer: 30 days

Furnishers generally must investigate and report results within 30 days, matching the bureau reinvestigation timeline.