Credit Score Worksheet
Credit Score Worksheet
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.
Capacity. It is the ability or intent to repay your debts, basing it on your household cashflow. Lenders will usually follow different methods such as debt payment ratio, the mortgage debt service ratio, or other measures to consider expenses being relative to a person’s income.
2. When are the five C’s important?
The five C’s are important when you are applying for credit. Reason why is because lenders want to know if you are creditworthy. Capacity is to repay what you borrowed. The lender will want to know how you will be repaying your loan. Capital is the money you have personally invested in the business. Collateral or guarantees are additional forms of security you can provide for the lender. Giving collateral to a lender means you promise to hand the assett over if you cannot pay off the loan as agreed. Conditions focus on the intended purpose of the loan. Character is the impression you make on the potential lender or investor.
3. Why is a credit score important?
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.
Capacity. It is the ability or intent to repay your debts, basing it on your household cashflow. Lenders will usually follow different methods such as debt payment ratio, the mortgage debt service ratio, or other measures to consider expenses being relative to a person’s income.
2. When are the five C’s important?
The five C’s are important when you are applying for credit. Reason why is because lenders want to know if you are creditworthy. Capacity is to repay what you borrowed. The lender will want to know how you will be repaying your loan. Capital is the money you have personally invested in the business. Collateral or guarantees are additional forms of security you can provide for the lender. Giving collateral to a lender means you promise to hand the assett over if you cannot pay off the loan as agreed. Conditions focus on the intended purpose of the loan. Character is the impression you make on the potential lender or investor.
3. Why is a credit score important?