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chapter6n7 (3) - How late was the payment How recent How...

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The_____the APR, the_____the true cost of credit… A) lower; higher B) lower; lower C) higher; lower D) none of these Answer: b Repositories or libraries of data Lending agencies report to 3 credit bureaus: Equifax Transunion Experian Report personal information, credit status, inquiries Each bureau uses different scoring models Some creditors or lenders do not report to all 3 bureaus Fair Isaac and Company - FICO Credit Score Your FICO score only looks at information in your credit report. Scores range from 300 – 850 “The very best rates go to people with scores above 770 ” (SmartMoney) “Below 620 are considered risky ” (LendingTree) “Anything below about 550 is considered awful ” (Fair Isaac Co.) MyFICO.com Pay all bills on time Types of credit Credit cards Retail cards Installment loans (car loans) Mortgages Late or missed payments:
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Unformatted text preview: How late was the payment? How recent? How much? How many? Amount owed on all accounts Balance on accounts Utilization ratios Less than 30% Don’t want to be over 50% Should you close accounts? How long have the accounts been maintained? Keep the oldest account open Are the cards being utilized? Stagnant, paid off cards are not used in credit score calculations. Opening too many cards or taking on too much debt in a short period of time Don’t open credit cards for the sign-up rewards Inquiries can be counted as a negative Your personal requests are NOT counted against you Score can improve as credit history improves Healthy mix of credit Mixture of credit card types Experience and maintenance of credit cards and installment loans 2-3 cards MAX...
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