Take the credit score IQ test
Here’s a quiz to test your credit score IQ.
Your credit score can have an enormous effect - positive or negative - on your life. If your credit score is bad, you could be turned down for a loan or be hit with a higher interest rate on your credit card. A good credit score can save you literally thousands of dollars a year.
A new report from the Consumer Federation of America shows there are a lot of people don't understand how credit scoring works.
Which of the following does a credit score typically measure -- knowledge of consumer credit, amount of consumer debt, risk of not repaying a loan or financial resources to pay back loans?
The answer is: risk of not repaying a loan. There are other factors that may influence this risk, but it's the risk itself that a credit score tries to measure over the life of the loan.
Is a person's age a factor used to calculate a credit score?
No, it's not. And neither is martial status.
Now, the age of your credit accounts may be a factor in your credit score. Generally, the longer you've been responsible with credit, the better your score, but your age doesn't matter.
Is ethnicity a factor used to calculate a credit score? Does race make a difference?
No, race is not a factor used to calculate a credit score. in fact, your race isn't even on your credit report, so there's no way it could play a role.
So what sort of things do cause your score to drop? The big ones are: bankruptcy or foreclosure, late payments, missed payments and carrying a high balance on your credit card. All of these factors make you a higher risk to a lender.
More info:
The Credit Score Quiz
What you don't know about credit scores could hurt you
Your credit score can have an enormous effect - positive or negative - on your life. If your credit score is bad, you could be turned down for a loan or be hit with a higher interest rate on your credit card. A good credit score can save you literally thousands of dollars a year.
A new report from the Consumer Federation of America shows there are a lot of people don't understand how credit scoring works.
Which of the following does a credit score typically measure -- knowledge of consumer credit, amount of consumer debt, risk of not repaying a loan or financial resources to pay back loans?
The answer is: risk of not repaying a loan. There are other factors that may influence this risk, but it's the risk itself that a credit score tries to measure over the life of the loan.
Is a person's age a factor used to calculate a credit score?
No, it's not. And neither is martial status.
Now, the age of your credit accounts may be a factor in your credit score. Generally, the longer you've been responsible with credit, the better your score, but your age doesn't matter.
Is ethnicity a factor used to calculate a credit score? Does race make a difference?
No, race is not a factor used to calculate a credit score. in fact, your race isn't even on your credit report, so there's no way it could play a role.
So what sort of things do cause your score to drop? The big ones are: bankruptcy or foreclosure, late payments, missed payments and carrying a high balance on your credit card. All of these factors make you a higher risk to a lender.
More info:
The Credit Score Quiz
What you don't know about credit scores could hurt you
