ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A portion of a person’s credit report that makes up about 10% of a consumer’s FICO credit score.
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A portion of a person’s credit report that is inconsequential in its effect on a consumer’s FICO credit score.
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A novel type of loan used for the purchase of homes and cars.
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None of the above
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Detailed explanation-1: -Credit mix accounts for 10% of your FICO® Score. New credit. The number of credit accounts you’ve recently opened, as well as the number of hard inquiries lenders make when you apply for credit, accounts for 10% of your FICO® Score.
Detailed explanation-2: -Amount of New Credit: The total amount of new credit accounts for 10% of your score. This takes into consideration how many accounts you’ve opened recently and how many recent hard inquiries you have on your credit report. Too many new accounts and inquiries could indicate greater credit risk.
Detailed explanation-3: -FICO Scores are calculated using many different pieces of credit data in your credit report. This data is grouped into five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).
Detailed explanation-4: -Is “credit score” the same as “FICO® score"? Basically, “credit score” and “FICO® score” are all referring to the same thing. A FICO® score is a type of credit scoring model. While different reporting agencies may weigh factors slightly differently, they are all essentially measuring the same thing.
Detailed explanation-5: -The main categories considered are a person’s payment history (35%), amounts owed (30%), length of credit history (15%), new credit accounts (10%), and types of credit used (10%). FICO scores are available from each of the three major credit bureaus, based on information contained in consumers’ credit reports.