208k views
4 votes
Which of these is TRUE reading FICO scores:

A. Scores tent to range from ratings numbered from 1 to 100
B. The higher the score, the better the loan product a borrower will qualify for.
C. The lower the score, the better the loan product a borrower will qualify for
D. Scores lower than 550 are the most desirable and excellent scores.

User Goscamp
by
7.6k points

1 Answer

4 votes

Final answer:

The true statement about FICO scores is that a higher score results in better terms for loan products. FICO scores typically range from 300 to 850, and scores below 550 are considered poor.

Step-by-step explanation:

The true statement regarding FICO scores is B. The higher the score, the better the loan product a borrower will qualify for. FICO scores do not range from 1 to 100, but generally from 300 to 850. The objective of a FICO score is to give lenders a quick, reliable indication of how likely you are to repay your loan on time. A higher score indicates to lenders that you're a lower risk, which can mean a lower interest rate and better loan terms. Conversely, a lower score can result in less favorable terms or even denial of credit altogether. Scores lower than 550 are considered poor, and would most likely not be described as the most desirable. FICO scores are crucial as they can influence the cost and availability of credit, which in turn impacts large financial decisions such as purchasing a car or home.

User PTucky Eagle
by
8.3k points