Credit History Worksheet

Directions

Identify the following factor descriptions to their corresponding C of credit. Highlight, bold, or underline the correct answer.

1. Jack and Jill want to buy a car. They are using another car for ___________ as a promise to pay.

a) Capacity
b) Capital
c) Collateral
d) Character
e) Conditions

2. Under these _______________, you may still be approved with a cosigner.

a) Capacity
b) Capital
c) Collateral
d) Character
e) Conditions

3. Henry has a history of not staying with a job for an extended period of time. Which of the C's would a lender be looking at?

a) Capacity
b) Capital
c) Collateral
d) Character
e) Conditions

4. Rex is seeking a loan for purchasing a boat. The lender is reviewing his debt-to-equity ratio. Which of the C's does this fall under?

a) Capacity
b) Capital
c) Collateral
d) Character
e) Conditions

5. Madaline is a stay-at-home mom seeking to start a home-based business. She would need a cosigner in order to qualify for a loan. What other C's might she need for this loan?

a) Capacity
b) Capital
c) Collateral
d) Character
e) Conditions

6. Lenders use a debt-payment-to-income ratio to evaluate this particular C.

a) Capacity
b) Capital
c) Collateral
d) Character
e) Conditions

Credit Score

Resources:

• Five C's web page located at the following link: http://www.loanuniverse.com/credit.html.
• Annual Credit Report website www.annualcreditreport.com.
• Fair Isaac website (www.myfico.com).

Directions

Go to the Fair Isaac Co. website, www.myfico.com Do not buy a credit score unless you choose to do so. For this activity, go to "Learn about scores". Review this page, and follow the link to "What's in your score". From this page, follow the links to learn more about credit scores.

Note: You do not have to share your personal credit score or other details in this worksheet.

Using what you have learned about credits scores and the Five C's, respond to the following in at least 50 words each:

1. When are the five C's important?

2. Why is a credit score important?

3. What are the top 2 factors in your FICO score? What actions can you take to earn the most points in these categories?

Credit Reports

Directions

Go to www.annualcreditreport.com, the only site authorized by the Federal Trade Commission to provide free consumer credit reports. Request one free credit report from one of the three credit reporting agencies (if you are unable to download a report, complete this activity using a sample credit report from www.experian.com)

Using what you have learned about credits reports, respond to the following in at least 50 words each:

1. What type of information is included on your credit report?

2. What did you find surprising about credit reports?