A FICO® score represents all of the following EXCEPT: A. the amount of money in your retirement account.
Your FICO score represents income to debt ratio, creditworthiness and length of credit history. Your FICO score is used by lendors to determine what you qualify for based on your debt to income ration, creditworthiness and the length of credit history. Building your credit is highly important so that lenders know you have taken out loans before and have been able to pay them back. The higher your score is, the better change you have of being loaned money.
Option (A) is correct. FICO score does not help in defining the determination for the retirement account.
Further Explanation:
FICO score:
FICO stands for Fair Isaac Corporation score. This score is generated by Fair Isaac Corporation. The company engaged in producing the consumer credit score that is used by the financial institution to decide whether the credit should be allotted to a person or not. The score above 650 is considered a very good credit history, and below 620 states that the financial records are not ideal.
Justification for the correct and incorrect option:
A.
The amount of money in your retirement account: This is the correct option because the FICO score only specifies the credit-related parameters of the individual. It does not state the retirement-related facts.
B.
Income to debt ratio: This is an incorrect option because FICO states the credit history and it would help in determining the current debt of the individual and the income to debt ratio can be calculated easily.
C.
Creditworthiness: This is an incorrect option because the primary characteristic of the FICO score is to provide the credit information of the individual.
D.
Length of credit history: This is an incorrect option because the FICO score provides all the information related to the credit history of the individual.
Thus, option (A) is correct. FICO score does not help in defining the determination for the retirement account.
Learn More:
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Answer Details:
Grade: Middle school
Chapter: Credit score
Subject: Business studies
Keywords: FICO, score, represents, amount, money, retirement, account, income, debt ratio, creditworthiness, length, credit history.