Credit Score Basics Post-quiz

Credit scores are not static and can change over time. They are influenced by various factors such as payment history, credit utilization, length of credit history, and new credit inquiries. Any changes in these factors, such as missed payments or new credit applications, can impact your credit score. Therefore, it is true that your credit score is always changing.

Payment history is the most important factor in determining a credit score because it reflects an individual's track record of making timely payments on their debts. Lenders and credit agencies consider this factor crucial as it demonstrates the borrower's reliability and responsibility in managing their financial obligations. A consistent history of on-time payments indicates a lower credit risk, which can result in a higher credit score. Conversely, late or missed payments can have a negative impact on the credit score, making payment history a key determinant in assessing an individual's creditworthiness.

The FICO credit score is a measure of an individual's creditworthiness, with a range of 300 to 850. A higher score indicates a lower credit risk. Therefore, the highest FICO credit score is 850, as it represents the best possible creditworthiness.

Removing negative items and adding positive items is the correct answer because it is a proactive approach to improving a poor credit score. By removing negative items, such as late payments or collections, from your credit report, you can reduce the negative impact on your score. Additionally, adding positive items, such as on-time payments or new lines of credit, can help to increase your creditworthiness and improve your score over time. This approach shows responsibility and a commitment to improving your creditworthiness, which can ultimately lead to a higher credit score.