Creditworthiness and Credit Reports

Flashcards covering key vocabulary related to creditworthiness, credit reports, and credit scores, as well as factors influencing them.

Creditworthiness

An individual's ability to repay a debt, based on factors like credit reports and scores.

Credit Report

A detailed summary of an individual's credit history, including payment history, loans, and debts.

Equifax, Experian, TransUnion

The three major credit bureaus in the United States that compile and maintain credit reports.

FICO Score

A widely used credit scoring system that evaluates creditworthiness based on payment history, amounts owed, credit history length, credit mix, and new credit.

Payment History

A record of how consistently an individual has made payments on their debts over time; an important factor in credit scores.

Credit Utilization

The amount of credit an individual is using compared to their total available credit; a key factor in credit scores.

Installment Credit

A type of credit with a fixed number of scheduled payments, such as a secured loan.

Revolving Credit

A type of credit that allows borrowing and repayment on an ongoing basis, such as an unsecured credit card.

Hard Inquiry

A credit check that occurs when applying for new credit, potentially affecting the credit score.

Soft Inquiry

A credit check that does not affect the credit score, such as when an individual checks their own credit report.

10%

Credit Mix and New Credit

15%

Length of credit History

35%

payment history

30%

amount owned

how many times can you view your credit report?

Once a year

Enhance credit score

by improving payment behavior and reducing debt

Name 4 or 5 organization that will look are your credit report

Banks, lenders, landlords, insurance companies, employers, and mortgage companies.

What is Experian boost?

A feature from Experian that allows consumers to add utility and telecom payment history to their credit report to potentially increase their credit score.

What is ultraFICO?

A new scoring model that considers consumers' banking behavior, such as cash reserves and account balances, in addition to traditional credit data to enhance their credit score.