Unit 7 Assignment 1: Calculating Credit Scores

Course Objectives and Learning Outcomes
Identify the factors that determine someone’s credit rating.
Calculate the cost of a loan given various ratings of the borrower.
Analyze various personal finance scenarios dealing with student loans, personal consumer loans, mortgages, the true cost of bad credit, compound interest, savings, investing in assets, budgeting, and using self-control when spending.

Assignment Requirements
A credit score needs to be protected and improved. You need to understand the true value of a credit score by researching the causes of bad credit scores and how to improve them.

Using the Internet and ITT Tech Virtual Library, you will research how the credit score is calculated and what influences the credit score.

Answer the following questions in detail.
How is your credit score (FICO) created?
Who reports your FICO score?
What are the factors in determining the FICO score?
What steps could you take to improve your FICO score?

Required Resources
Skills for Living a Rich Life, Chapter 12
Computer with MS Word and Internet access
ITT Tech Virtual Library
Printer

Submission Requirements
Prepare a two- to three-page typed paper, double-spaced, using 12-point Times New Roman font. Please include appropriate references in APA format. This assignment is due at the beginning of Unit 8.

GS2745

UNIT 7 ASSIGNMENT 1

How is your credit score (FICO) created? FICO Scores are calculated from several different pieces of credit data in your credit report. This data is grouped into five categories as outlined below. The percentages in the chart reflect how important each of the categories is in determining how your FICO Scores are calculated. Your FICO Scores consider both positive and negative information in your credit report. Late payments will lower your FICO Scores, but