FICO & D&B Rating Models Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 FICO & D&B Rating Models flashcards as text
Which of the following is NOT a component used in calculating a FICO business credit score?
Answer: Number of employees at the business
Employee count is not a factor in FICO business credit scores; scores focus on payment behavior, credit usage, and public records.
The D&B Failure Score predicts which specific outcome?
Answer: The probability of formal business failure (bankruptcy, insolvency) within 12 months
The D&B Failure Score specifically predicts the probability that a business will formally fail — through bankruptcy or similar proceedings — within the next 12 months.
A consumer's FICO score dropped 40 points after they maxed out a credit card. If they pay the balance to zero, approximately how long will it take for the score to recover?
Answer: As quickly as 1–2 billing cycles after the balance reports
Because the damage was purely utilization-based (no delinquency), once the zero balance is reported — typically within 1–2 billing cycles — the score should rebound quickly.
When extending B2B credit, why might a credit professional prefer the D&B PAYDEX score over the FICO consumer score for evaluating a small business?
Answer: PAYDEX is based specifically on trade payment experiences relevant to business-to-business credit decisions
PAYDEX is built from commercial trade payment data, making it directly relevant to how a business honors vendor invoices — the exact risk a B2B creditor faces.
Which FICO score range is considered 'very poor' and typically results in denial or requiring secured credit?
Answer: 300–579
FICO scores from 300 to 579 are classified as 'very poor,' and applicants in this range are often denied unsecured credit or required to provide collateral.
A credit analyst sees that a company's D&B PAYDEX score dropped from 78 to 62 over six months. This most likely indicates:
Answer: The company's payment timeliness has deteriorated significantly
A PAYDEX decline from 78 to 62 suggests the business has shifted from near-prompt payment to paying roughly 15 days beyond terms, signaling worsening payment behavior.
In FICO's scoring framework, which of the following is considered a 'thin file' risk?
Answer: A consumer with fewer than 3–5 credit accounts and limited credit history
A 'thin file' refers to a credit profile with too few accounts or too little history for FICO to generate a reliable score, typically fewer than 3–5 tradelines.