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18 Cards in this Set
- Front
- Back
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Be able to explain what credit score is. |
A number representing the creditworthiness of a person. Used by lenders to access the likelihood that they will repay his/her debts. |
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Know numerical range of someone's FICO credit score |
300-850 |
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Know the names of the three major FICO credit bureaus |
A.) Equifax B.) Transunion C.) Experian |
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Be able to name 2 benefits of having a high credit score. |
A.) Better interest rates B.) More money can be borrowed C.) Able to get a charge card |
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Know the relationship between credit score and APR |
Higher credit score ----- lower/ better APR which means more money to potentially borrow |
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How can you find out what your credit score is? |
A.) websites B.) banks |
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Know the 5 main factors that contribute to ones credit score and be able to describe them. |
- payment history - credit utilization - age of credit history - total number of accounts - hard credit inquiries |
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Name 5 components that are not factored into your credit score. |
- race - gender -religion - age - marital status |
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Know what a revolving account is. |
When someone is in debt and they continue to pay the minimum amount. |
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Name the four C's of credit |
- capital - collateral - capacity - character
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How is credit score calculated? |
- based on purchases , when/how you pay your bills - based on a person's past credit history |
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What is FICO? |
credit scores that most lenders use to determine your credit risk |
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Payment History |
(35%) Paying your bills on time |
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Credit Utilization |
(30%) The amount of money owed divided by your credit line. The lower the utilization the better. YOU WANT NUMERATOR LOW AND DENOMINATOR HIGH
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Age of Credit History |
(15%) How long you have been a customer in total and on average |
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Total Accounts |
(10%) The number of open and closed credit cards and other loans accounts. |
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Hard credit Inquiries |
(10%) When applying for a new credit card of loans |
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What else factors but not as much |
derogatory marks |
