FICO & D&B Rating Models Flashcards

Under FICO Score 9, which change was made compared to FICO Score 8 regarding medical debt?

Answer: Paid medical collections no longer negatively impact the score

FICO Score 9 reduces the negative impact of medical collections and ignores paid medical collection accounts.

A business has no D&B PAYDEX score. What is the most likely reason?

Answer: D&B has fewer than 3 payment experiences on file

D&B requires a minimum of three payment experiences reported by trade references to generate a PAYDEX score.

Which of the following best describes the D&B Delinquency Predictor Score?

Answer: Predicts likelihood of severely delinquent payment over the next 12 months

The D&B Delinquency Predictor Score forecasts the probability that a business will become severely delinquent on payments within 12 months.

FICO Score 10T introduced 'trended data.' What does trended data capture?

Answer: The directional movement of balances and payments over 24 months

Trended data shows whether balances are rising or falling over the past 24 months, distinguishing transactors from revolvers.

When a creditor performs a 'soft inquiry' on a FICO score, what is the impact?

Answer: There is no impact on the FICO score

Soft inquiries — such as pre-approval checks or account monitoring — do not affect the FICO score in any way.

D&B's Maximum Credit Recommendation is best described as:

Answer: A suggested dollar ceiling for credit extended to a business

D&B's Maximum Credit Recommendation is a suggested upper limit on the dollar amount of credit a creditor should extend to a given business.

Which action would most directly improve a consumer's FICO 'amounts owed' category?

Answer: Paying down revolving credit card balances

Reducing revolving balances lowers credit utilization, which is the primary driver of the 'amounts owed' FICO category.