ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A type of credit score that makes up a large portion of a person’s credit report that lenders use to assess an applicants rewards
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A type of credit score that makes up a large portion of a person’s credit report that lenders use to assess an applicants risk
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A type of credit score that makes up a small portion of a person’s credit report that lenders use to assess an applicants risk
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None of the above
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Detailed explanation-1: -1:What is a FICO Score? FICO – Fair Isaac Corporation Score, is a credit score system that is very popular and well-established in the US. They have recently forayed into the Indian market to offer a better credit rating system for lenders.
Detailed explanation-2: -FICO is an acronym for Fair Isaac Corporation, the company that developed the FICO® credit scoring models that many lenders use to help accurately predict a consumer’s ability to repay a debt on time.
Detailed explanation-3: -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.
Detailed explanation-4: -What’s in my FICO® Scores? 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-5: -A FICO score is a three-digit number, typically on a 300-850 range, that tells lenders how likely a consumer is to repay borrowed money based on their credit history.