Credit Score
University of Phoenix Material
Credit Score
Resources: • Five C’s web page located at the following link: http://www.loanuniverse.com/credit.html. • Credit Karma website (www.creditkarma.com) • Fair Isaac website (www.myfico.com)
Directions
Go to the Fair Isaac Co. website, www.myfico.com. Do not buy a credit score unless you choose to do so. For this activity, go to “Learn about scores”. Review this page, and follow the link to “What’s in your score”. From this page, follow the links to learn more about credit scores.
Note: You do not have to share your personal credit score or other details in this worksheet.
Using what you have learned about credits scores and the Five C’s, respond to the following in 50-to 100-words each:
1. Your household cash flow helps to determine which C? Describe this C.
It helps you determine the capacity C. Capacity meaning the ability or intent to repay your debts, based upon your household cash flow; lenders typically follow different methods to consider any expenses relative to the person’s income. Lenders may evaluate your capacity by looking at your sources of income and your expenses.
2. When are the five C’s important?
The five C’s are important because anyone who is wanting to apply for a credit card or a loan must undertand that, each C has it’s own definition and in the end you need to be able to comply with all of them in order to obtain a loan or a credit card. If a person is not meeting any of the five C’s there’s always an option of having a co-signer sign as well. Yet this might be risky for the co-signer if the person is unable to keep up with monthly payments. In either case it important to be aware of the five C’s and how they can benefit you in the long run.
3. Why is a credit score important?
A credit score is very important because its tells lenders and creditors how likely you are to pay back the debt you owe. Your score helps
Credit Score
Resources: • Five C’s web page located at the following link: http://www.loanuniverse.com/credit.html. • Credit Karma website (www.creditkarma.com) • Fair Isaac website (www.myfico.com)
Directions
Go to the Fair Isaac Co. website, www.myfico.com. Do not buy a credit score unless you choose to do so. For this activity, go to “Learn about scores”. Review this page, and follow the link to “What’s in your score”. From this page, follow the links to learn more about credit scores.
Note: You do not have to share your personal credit score or other details in this worksheet.
Using what you have learned about credits scores and the Five C’s, respond to the following in 50-to 100-words each:
1. Your household cash flow helps to determine which C? Describe this C.
It helps you determine the capacity C. Capacity meaning the ability or intent to repay your debts, based upon your household cash flow; lenders typically follow different methods to consider any expenses relative to the person’s income. Lenders may evaluate your capacity by looking at your sources of income and your expenses.
2. When are the five C’s important?
The five C’s are important because anyone who is wanting to apply for a credit card or a loan must undertand that, each C has it’s own definition and in the end you need to be able to comply with all of them in order to obtain a loan or a credit card. If a person is not meeting any of the five C’s there’s always an option of having a co-signer sign as well. Yet this might be risky for the co-signer if the person is unable to keep up with monthly payments. In either case it important to be aware of the five C’s and how they can benefit you in the long run.
3. Why is a credit score important?
A credit score is very important because its tells lenders and creditors how likely you are to pay back the debt you owe. Your score helps