UGBA 135 Midterm
Can you increase credit score by increasing your credit limit? - ✔️✔️Yes, only if you
stay below a 50% debt-to-credit ratio on each credit card. 30% ratio is the best for top
scores. Increase credit limit to lower credit ratio
Three credit scoring agencies - ✔️✔️Transunion (tuc.com) -- Empirica score
Equifax (equifax.com) -- Beacan score
Experian (experian.com) -- Experian model
credit hold on account - ✔️✔️-when a customer is consistently late in making
payments, has exceeded their credit limit, or is identified as a bad risk, you can prevent
additional credit purchases by placing their account on credit hold
-if hold is executed, it will count against credit
FICO Score - ✔️✔️measure of consumer credit risk
Highest FICO Score - ✔️✔️850
Factors determining FICO Score - ✔️✔️Credit report is based on:
-35% paying your bills on time over time
-30% your debt-to-credit ratio ( borrowing money/ credit limit)
-15% length of credit history
-10% mix of credit cards and loans (like to see things other than credit card; Rent, any
loan (e.g. leasing car))
-10% new accounts and recent applications for credit
How many FICO scores does a person have? - ✔️✔️3
How do you establish good credit? - ✔️✔️borrow $ and pay it back on time according
to its terms
How much is taken out of your paycheck for SS and Medicare? - ✔️✔️-12.4% of
earned income to SS
-2.9% of earned income to Medicare
Debt-to-credit ratio - ✔️✔️how to calculate:
-$3000 debt, $6000 in credit :: 3000/6000 = 50% D/C ratio
-try to be below 50% || 30% is the best
, Identity Theft: if you're a victim - ✔️✔️-close and replace all accounts that have been
tampered with or didn't open
-file a police report
If you are carrying a balance and you pay more than the minimum payment, where does
the excess go? - ✔️✔️the excess is used to pay off debt of highest interest rate, not the
card with the smallest balance
Maximum interest on credit card account - ✔️✔️no legal maximum
Who can see your credit scores? - ✔️✔️
Website for free credit report (federally mandated for credit reports) -
✔️✔️annualcreditreport.com
Best time to establish credit - ✔️✔️when you don't need it
aka younger i thinks
When are your credit payments due? - ✔️✔️generally about 21-25 days after your
billing cycle ends
Secure vs unsecure line of credit - ✔️✔️Debit is secure
Credit is unsecure (nothing to back it up other than credit history)
How does cancelling inactive credit cards affect your credit score? - ✔️✔️-can lower
because it will increase your d/c ratio
-if you cancel, cancel newest card first
Prepaid cards - ✔️✔️-offered by banks and nonbanks
-not linked to bank accounts
-fees: activation, inactivity, to load money onto cards, if you don't load money each
month, check balance info, to use an ATM for cash, for using a check to close an
account
Cash advance - ✔️✔️-using your credit card to withdraw cash
-higher interest rates, no grace period (incur interest rates right off the bat)
grace period - ✔️✔️set length of time after the due date during which payment may be
made without penalty
What is a retail charge card? - ✔️✔️-a credit card issued by a retailer allowing you to
charge purchases made only with their store
-higher interest rate 20-30% on unpaid balances
Can you increase credit score by increasing your credit limit? - ✔️✔️Yes, only if you
stay below a 50% debt-to-credit ratio on each credit card. 30% ratio is the best for top
scores. Increase credit limit to lower credit ratio
Three credit scoring agencies - ✔️✔️Transunion (tuc.com) -- Empirica score
Equifax (equifax.com) -- Beacan score
Experian (experian.com) -- Experian model
credit hold on account - ✔️✔️-when a customer is consistently late in making
payments, has exceeded their credit limit, or is identified as a bad risk, you can prevent
additional credit purchases by placing their account on credit hold
-if hold is executed, it will count against credit
FICO Score - ✔️✔️measure of consumer credit risk
Highest FICO Score - ✔️✔️850
Factors determining FICO Score - ✔️✔️Credit report is based on:
-35% paying your bills on time over time
-30% your debt-to-credit ratio ( borrowing money/ credit limit)
-15% length of credit history
-10% mix of credit cards and loans (like to see things other than credit card; Rent, any
loan (e.g. leasing car))
-10% new accounts and recent applications for credit
How many FICO scores does a person have? - ✔️✔️3
How do you establish good credit? - ✔️✔️borrow $ and pay it back on time according
to its terms
How much is taken out of your paycheck for SS and Medicare? - ✔️✔️-12.4% of
earned income to SS
-2.9% of earned income to Medicare
Debt-to-credit ratio - ✔️✔️how to calculate:
-$3000 debt, $6000 in credit :: 3000/6000 = 50% D/C ratio
-try to be below 50% || 30% is the best
, Identity Theft: if you're a victim - ✔️✔️-close and replace all accounts that have been
tampered with or didn't open
-file a police report
If you are carrying a balance and you pay more than the minimum payment, where does
the excess go? - ✔️✔️the excess is used to pay off debt of highest interest rate, not the
card with the smallest balance
Maximum interest on credit card account - ✔️✔️no legal maximum
Who can see your credit scores? - ✔️✔️
Website for free credit report (federally mandated for credit reports) -
✔️✔️annualcreditreport.com
Best time to establish credit - ✔️✔️when you don't need it
aka younger i thinks
When are your credit payments due? - ✔️✔️generally about 21-25 days after your
billing cycle ends
Secure vs unsecure line of credit - ✔️✔️Debit is secure
Credit is unsecure (nothing to back it up other than credit history)
How does cancelling inactive credit cards affect your credit score? - ✔️✔️-can lower
because it will increase your d/c ratio
-if you cancel, cancel newest card first
Prepaid cards - ✔️✔️-offered by banks and nonbanks
-not linked to bank accounts
-fees: activation, inactivity, to load money onto cards, if you don't load money each
month, check balance info, to use an ATM for cash, for using a check to close an
account
Cash advance - ✔️✔️-using your credit card to withdraw cash
-higher interest rates, no grace period (incur interest rates right off the bat)
grace period - ✔️✔️set length of time after the due date during which payment may be
made without penalty
What is a retail charge card? - ✔️✔️-a credit card issued by a retailer allowing you to
charge purchases made only with their store
-higher interest rate 20-30% on unpaid balances
