Understanding Credit Scores and Reporting Quiz

It reflects how likely someone is to repay borrowed money.

It shows whether someone has paid debts on time in the past.

It helps lenders assess the risk of lending money to an individual.

Scores above 700 are generally considered good, indicating lower risk to lenders.

300 is the lowest score, indicating high risk, while 850 is the highest, indicating low risk.

The major three are Equifax, Experian, and TransUnion.

This helps individuals monitor their credit and detect errors.

It helps individuals keep track of their credit health.

While important for loan approvals, income level is not directly included in credit scores.

It's the cap on how much one can borrow on a credit account.

It includes late payments, bankruptcies, and foreclosures.

It accounts for about 35% of a credit score.

It promotes accuracy, fairness, and privacy of information in credit reports.

It shows responsible credit management and can boost a credit score over time.

Common models include FICO and VantageScore.

It suggests that a borrower is using a larger portion of their available credit, which can indicate financial strain.