Do you know most americans have little knowledge about credit scoring?
Take the Credit Score Quiz and find out where your stand:
Answer True or False then scroll down and click on the Answer Key:
- The most heavily weighted part of my credit score is the amount of money I make.
- Credit scores were invented by the Fair Isaacs Company, and the exact scoring formula is proprietary information, (a trade secret).
- If I have a low credit score I am doomed for 7 years.
- When applying for a mortgage, lenders take an average of my three credit scores.
- It is widely held that 50% of all credit reports contain errors.
- The word FICO stands for Fair Information Credit Organization.
- It is always good to close old credit cards I am not using.
- If I want to raise my credit score I can write to the credit bureaus and tell them the negative accounts on my credit report are not mine.
- There are only three Credit Reporting agencies.
- The credit reporting agencies by law must keep my information private unless I authorize someone to view my report.
- The numeric range for “FICO” credit scores is from 350 to 850.
- The law which governs my rights regarding credit reporting is called the Fair Debt Collection Practices Act.
> Click Here To Reveal Answer Key <
- False. The most heavily weighted part of my credit score is whether or not I make my payments in a timely fashion. It comprises 35% of your score.
- False. Low credit profiles can be changed. A credit score is like a snapshot in time, always changing. Do not allow yourself to be a victim, always be proactive when it comes to your credit score.
- False. Lenders use what is called the mid-score. The mid score is not an average but rather which of your three scores, either Experian, Trans union or Equifax is in between the other two.
- False. It is widely held that 70% of all credit reports contain errors. What types of errors? Here are some examples:
- You have a similar name to another person. You get some of their information on your report.
- The Date of Last activity is moved forward from its actual date. This date determines when the item is removed from your report. Moving it forward means that it will take longer to drop off your report. Definition: The date of last activity is the date you actually defaulted on the account.
- You paid a creditor in full but the creditor failed to remove the judgment from your report. (Never pay a collection item in full until you have signed proof from the collector that you paid and that they agree to remove the judgment from your credit report). You will save yourself a lot of grief.
- False. The word Fico stands for “Fair Isaac Corporation, ”, the creators of the FICO score.
- False. Unless you are entering a Debt Management Program, or the annual fee is ridiculous, do not close a credit card account in good standing. If you do not want to use it, stick it in a drawer. Leaving it open will help your credit score.
- False, but it’s a trick question. You can dispute any item on your report, but the dispute must be valid. If the item is yours you may be able to find an error and dispute it that way. If an item is inaccurate and negative, you can ask for a correction, if the item is not corrected in 30 days, you can ask for a deletion.
- False. The 3 most common reporting agencies in use when you apply for a loan or credit card are Experian, Trans Union, and Equifax. However, quite often these agencies get there information from other 3rd party repositories of credit information. Which is one of the reasons your scores can vary widely.
- True. but with a caveat. The credit bureaus sell your information all the time. Not your credit report, but, if you apply for a mortgage, the credit bureaus will sell that information to lead companies which sell leads for mortgages. The information about your FICO score range is sold to banks, this is how you get all those credit card offers. Yes, Credit reporting is BIG business.
- False. The law which governs Credit reporting is the “Fair Credit Reporting Act”. The Fair Debt Collection Practices Act governs Collection practices and your rights regarding debt collection.