Alexa Campbell - INTERACTIVE_ FICO Credit Scores
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Lone Star College System, Woodlands *
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Course
1307
Subject
Economics
Date
Jan 9, 2024
Type
docx
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5
Uploaded by ProfFlowerWolverine28
INTERACTIVE: FICO Credit Scores
Interactive:
myFICO Credit Score Estimator
As a reminder, this pie chart describes how your credit score is
calculated using 5 different components of your credit history.
You’ve been assigned to be the credit counselor for Sam,
Jennifer, and Danielle, whose profiles follow. For each person,
follow the directions to understand the impact of certain
financial decisions on their credit scores.
SAM SPENDTHRIFT
is a college junior.
He couldn’t wait until he turned 21, so he could apply for a
few credit cards.
Here are some details about his profile:
1.
For each of Sam’s actions, mark whether you think that factor improves (+) or decreases (--)
his credit score.
#
Detail
+
or
--
1
He currently has 3 credit cards
+
1 (cont)
He got his first credit card 8 months ago
+
2
He doesn’t have any student loans
+
3
He has applied for 5 credit cards in the last year (and had 3 applications
accepted)
+
4
He opened his last credit card 4 months ago
+
5
All of his 3 credit cards currently have a balance, as he has had trouble
paying off his card each month
-
6
He has $4,000 currently outstanding on all his credit cards
+
7
He missed a payment in the last three months when he forgot to notify
the card company that he had recently moved out of his apartment. He
was 30 days behind on making a payment.
-
8
He has no cards currently past due
+
9
His credit card balances of $4,000 are about 65% of his overall limits
-
10
He has never gone through a bankruptcy or other proceeding
+
1
2.
What do you think Sam’s credit score is (from a range of 300-850)?
450?
3.
Now, go to the
myFICO Credit Score Estimator
and use Sam’s information to complete it.
What is Sam’s estimated credit score?
fair
4.
What does Sam’s score say about his creditworthiness?
Good responsibility, but not worthy
5.
As his credit counselor, what recommendations would you make to Sam to improve his
credit score?
Reduce debt and balances
2
Jennifer CREDITSMART
is a college senior
.
Her parents gave her a credit card when she turned
17 by making her an authorized user on their credit card.
As an authorized user on their account,
she benefited from her parent’s diligent credit card habits.
She also has a few student loans in
college that she will start repaying after she graduates.
Here are some details about her for the
profile:
6.
For each of Jennifer’s actions, mark whether you think that factor improves (+) or decreases
(--) her credit score.
#
Detail
+
or
--
1
She currently has 1 credit card
+
1 (cont)
She got this first credit card more than 15 years ago. This is a great
credit score hack; she benefits from the fact that her parents had this
credit card for 15 years.
-
2
She got her first student loan 3 years ago
+
3
She has received one student loan in the last year
+
4
She got that student loan over six months ago
-
5
Only her three student loans carry a balance, since she and her parents
always pay the credit card bill off in full every month
+
6
She has $15,000 currently outstanding on her student loans
-
7
She (and her parents) have never missed a payment
+
8
None of her loans or credit cards are past due (and her parents are
always on time with their credit card)
-
9
Since she and her parents pay off the bill every month, she has $0
balance
+
10
She has never gone through a bankruptcy or other negative
proceeding
+
7.
What do you think Jennifer’s credit score is (from a range of 300-850)?
400-500
8.
Now, go to the
myFICO Credit Score Estimator
and use Jennifer’s information to complete
3
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