Credit Score Flashcard

Front

What is a credit score?

Back

A credit score is a numerical representation of a person's creditworthiness, based on their credit history and other financial behaviors.

Front

What factors are typically included in a credit report?

Back

Factors typically included in a credit report are payment history, amounts owed, length of credit history, new credit, and types of credit used.

Front

Which type of information is not included in a credit report?

Back

Medical information is not included in an individual's credit report.

Front

What does a credit score of 570 indicate?

Back

A credit score of 570 is considered poor.

Front

What is considered an exceptional credit score?

Back

An exceptional credit score is typically considered to be 800 or above.

Front

How does a higher credit score affect interest rates?

Back

A higher credit score generally leads to lower interest rates, not higher.

Front

What is the significance of payment history in a credit score?

Back

Payment history is the most significant factor in determining a credit score, as it reflects an individual's reliability in repaying debts.

Front

What is the impact of applying for new credit on your credit score?

Back

Applying for new credit can temporarily lower your credit score due to hard inquiries.

Front

How often should you check your credit report?

Back

You should check your credit report at least once a year to ensure accuracy and to monitor for identity theft.

Front

What is the difference between a hard inquiry and a soft inquiry?

Back

A hard inquiry occurs when a lender checks your credit for lending purposes, while a soft inquiry occurs when you check your own credit or when a lender checks your credit for pre-approval.