Chapter 14: Application Analysis - Borrower Credit
1.
Define the term trade line.
Information on a debt, found in a credit report, that contains the date that the credit was granted, the balance, terms and repayment history
2.
Discuss the items that are involved in calculating a credit
score.
Payment History, Amounts Owed, Length of Credit History, New Credit and Inquiries, Types of Credit, and Number of Trades on File are all used to calculate a credit score.
3.
What can an individual do to increase his or her credit
score?
Ensure that payments are always made on time; limit the number of credit inquiries; maintain balances below 30% of credit limits.
4.
If an individual has a judgment filed against him or her, in
what section of a credit bureau would this information be found?
Public Records section.
5.
If an individual has an account rated as an R3 on his or her
credit bureau, what type of credit is this rating referring to and how many
months in arrears is this account?
This is a revolving account such as a credit card and it is 2 months in arrears.
6.
What is the relationship between a credit score and the
delinquency rates of Canadians?
The lower the credit score the higher the delinquency rate.
7.
How long does a bankruptcy remain on an individual’s credit
report provided by:
a) Equifax? 6 years.
b) Transunion? 7 years.
8.
How long does credit counselling remain on an individual’s
credit report provided by:
a) Equifax? 3 years.
b) Transunion? 2 years.
9.
If an individual disputes an item in his or her credit
report, what can he or she do?
Contact the Credit Bureau to remove the item.
10.
Can a Mortgage Agent provide a copy of a client’s credit
report to the client?
No, a Borrower must contact the Credit Bureau directly for this report.