You’ve made it to the end. But in truth, this isn’t the end at all—it’s the beginning.
You’ve just been handed what most Americans never get: a blueprint. Not the watered-down fluff from social media influencers. Not the “credit hacks” that backfire. This was the truth—raw and unfiltered—about how the credit system actually works.
And here’s the truth you should tattoo on your brain:
Credit scoring isn’t designed to help you. It’s designed to judge you, control you, and profit from your behavior.
But now you know the rules of the game. And when you know the rules, you stop being a pawn—you start playing like a grandmaster.
🎯 High Points of the Credit Scoring Course: What You Now Know
here are the high points from this course
🧠 1. You Don’t Have Just One Credit Score
The idea that “you have a credit score” is a myth. You actually have hundreds.
FICO has multiple versions (FICO 2, 4, 5, 8, 9, 10, and 10T). Each version calculates your risk slightly differently.
Lenders choose which version they use, and you’re never told which one.
The score you see online may be 100+ points off from the one your lender is using.
📌 Real-world takeaway: You were never meant to understand this system. But now you do.
🏢 2. Credit Bureaus Are Not Your Friends
Equifax, Experian, and TransUnion are for-profit data brokers—they are not government agencies.
Their business model: collect your data, sell it, and offer you credit monitoring for problems they helped create.
In 2022, Experian alone made over $6 billion from selling your financial behavior.
🔍 Translation: You’re the product—and the customer. That’s the game.
🧱 3. FICO’s Five Pillars of Credit Scoring
These five ingredients make up your score:
Payment History (35%) – Do you pay on time?
Amounts Owed / Utilization (30%) – How close are your balances to your credit limits?
Length of Credit History (15%) – How long have you had credit?
New Credit (10%) – How often are you applying for new accounts?
Credit Mix (10%) – Do you use a variety of account types?
🎯 The two biggest? Payment history and utilization = 65% of your score.
🔍 4. Hard Inquiries vs. Soft Inquiries
Hard inquiries (you apply for credit) can lower your score by 3–5 points each.
Soft inquiries (you check your own credit or get pre-approved) do not hurt your score.
Shopping for a mortgage or auto loan? All inquiries within a short window (14–45 days) count as one inquiry.
🚨 But credit card applications? Each one hits you separately. No mercy.
💳 5. Utilization: The Silent Score Killer
FICO doesn’t just care how much you owe—but how much of your available credit you're using.
This is called your credit utilization ratio.
Aim for:
Under 30% per card (bare minimum)
Under 15% total (ideal)
Under 10% if you're playing to win
💡 Trick: Ask for a credit limit increase—improves your ratio overnight.
📆 6. Credit History: Older Is Better
The age of your oldest account and your average account age matter.
Closing your oldest card? Big mistake—it shortens your history.
Opening lots of new accounts? Lowers your average age.
🧠 Credit is like wine. Let it age.
🧾 7. Student Loans Multiply Damage
Each loan disbursement is listed as a separate trade line on your credit report.
Miss one payment across multiple loans? It can show as multiple late payments.
Even if the loans are in deferment, they show up.
🚧 You can wreck your credit with one missed payment across five loans.
💣 8. Public Records & Collections = Maximum Damage
Bankruptcies, foreclosures, tax liens, and collections devastate your score.
These are not reported by your lender—they’re scraped from public records and court filings.
You won’t know until it’s already on your report.
⚖️ A $200 medical collection can cost you thousands in interest later.
🔄 9. FICO 10T: The Trended Data Trap
FICO 10T watches how your balances change over time.
It’s not just a snapshot—it tracks patterns.
If you carry balances month after month, even if you pay on time, you’ll be penalized.
🕵️ They’re not just scoring your debt—they’re profiling your behavior.
📉 10. Score Confusion Is the Feature, Not the Bug
Free scores from CreditKarma use VantageScore, not FICO. Most lenders don’t use VantageScore.
Mortgage lenders often use FICO 2, 4, or 5, not FICO 8 or 10.
The same person, on the same day, can have scores ranging from 603 to 685 depending on the model.
🧩 No single score tells the whole story. Knowing which one is in play gives you the edge.
🔧 11. You Can Build Credit—From Nothing
No score? Start with:
A secured card
A credit-builder loan
Becoming an authorized user on someone else’s card
Use it. Pay on time. Keep balances low. That’s it.
📘 My book Financial Reinvention gives you the playbook.
💡 FINAL TRUTH: THE SYSTEM ISN’T FAIR—BUT IT IS PREDICTABLE
Learn the rules. Master the system.
And you stop being a victim—and start playing to win.
What follows is a test. Following the test, I am giving you the answers. Use this to determine whether or not you have gained information.
Do not be afraid of tests. They’re not meant to defeat you—they're designed to reveal what you know, highlight what you need to work on, and help you grow stronger in the process.
🧠 25 Credit Scoring Questions You Should Be Able to Answer
Test your credit IQ—see how well you really understand the system that rules your financial life.
1. What is the most commonly used credit score model by lenders in the U.S.?
A) VantageScore 4.0
B) FICO 8
C) FICO 95
D) Experian Boost
2. Which of the following credit scoring components carries the highest weight in FICO scores?
A) Amounts Owed
B) Length of Credit History
C) Payment History
D) Types of Credit Used
3. What does “credit utilization” refer to?
A) The total number of credit cards you have
B) The percentage of your income spent on credit
C) The ratio of your credit card balances to limits
D) The number of inquiries on your credit report
4. Which is NOT considered a credit bureau?
A) Experian
B) Equifax
C) TransUnion
D) Fair Isaac Corporation (FICO)
5. What happens if your student loans are in deferment?
A) They disappear from your credit report
B) They are still reported on your credit file
C) Your score automatically increases
D) They count as missed payments
6. Why can a person have multiple credit scores?
A) Each bureau uses different personal data
B) There are different scoring models for different purposes
C) Not all lenders report to all bureaus
D) All of the above
7. Which of the following actions could hurt your credit the most?
A) Closing a new credit card
B) Making a single 30-day late payment
C) Applying for a soft inquiry
D) Paying off a loan early
8. A high credit utilization ratio typically signals:
A) Responsible use of credit
B) High risk to lenders
C) A long credit history
D) Too many inquiries
9. Which credit scoring model considers “trended data” over time?
A) FICO 8
B) FICO 2
C) FICO 10T
D) VantageScore 1.0
10. What is the recommended credit utilization ratio to maintain a good score?
A) Below 50%
B) Below 30%
C) Below 70%
D) 100%
11. Which of the following is considered an installment loan?
A) Credit card
B) Auto loan
C) Store card
D) Line of credit
12. What do soft inquiries affect?
A) Credit score negatively
B) Credit score positively
C) Credit score not at all
D) Payment history
13. Which version of the FICO score is most commonly used for mortgage applications?
A) FICO 8
B) FICO 10T
C) FICO 2
D) FICO Auto Score
14. If you miss a payment by 90+ days, what is the likely credit impact?
A) Temporary boost
B) No impact
C) Severe drop and red-flag status
D) Slight dip that recovers quickly
15. How many points can a single hard inquiry drop your FICO score by?
A) 10–15
B) 1–2
C) 3–5
D) 20–30
16. Credit cards are what type of credit?
A) Installment
B) Revolving
C) Open
D) Deferred
17. Which factor helps increase your credit mix?
A) Only having credit cards
B) Only having student loans
C) Having a blend of loans and credit cards
D) Paying everything with cash
18. Which organization created the FICO score?
A) TransUnion
B) Credit Karma
C) Fair Isaac Corporation
D) Equifax
19. What happens when you close your oldest credit card?
A) Your score increases
B) Your credit history may shorten
C) Your score resets
D) Your utilization improves
20. Which of these does NOT typically appear on a credit report?
A) Criminal records
B) Credit inquiries
C) Installment loans
D) Revolving accounts
21. What kind of score might a lender use for an auto loan?
A) FICO Auto Score
B) VantageScore 3.0
C) FICO 95
D) FICO Mortgage Score
22. Why can closing multiple accounts hurt your score?
A) It increases your payment history
B) It lowers your income
C) It reduces average age and utilization buffer
D) It adds hard inquiries
23. Which service should you use to get free credit reports from all three bureaus?
A) CreditKarma.com
B) Experian.com
C) AnnualCreditReport.com
D) CreditCheckTotal.com
24. What term describes someone who doesn’t have enough credit data to generate a score?
A) Delinquent
B) High-risk
C) Credit invisible
D) Hard pull
25. What is the main purpose of a credit score?
A) To monitor savings
B) To report income
C) To predict credit repayment behavior
D) To penalize overspending
Here’s the Answer Sheet for the 25 multiple-choice questions:
✅ Answer Key: 25 Credit Scoring Questions
B – FICO 8
C – Payment History
C – The ratio of your credit card balances to limits
D – Fair Isaac Corporation (FICO)
B – They are still reported on your credit file
D – All of the above
B – Making a single 30-day late payment
B – High risk to lenders
C – FICO 10T
B – Below 30%
B – Auto loan
C – Credit score not at all
C – FICO 2
C – Severe drop and red-flag status
C – 3–5
B – Revolving
C – Having a blend of loans and credit cards
C – Fair Isaac Corporation
B – Your credit history may shorten
A – Criminal records
A – FICO Auto Score
C – It reduces average age and utilization buffer
C – AnnualCreditReport.com
C – Credit invisible
C – To predict credit repayment behavior
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