The average American FICO credit score has increased to 703, the highest since 2005. The average score in California is even a little higher, at 708. This is good news – and it makes sense.

During the downturn, many people lost their jobs, lost their homes, declared bankruptcy, and had other problems that created havoc on their economic stability, resulting in lower credit scores.

But people’s understanding of how credit works has diminished. Two recent surveys, one by the Consumer Federation of America, the second by NerdWallet and the Harris Poll, show many Americans don’t understand what a credit score is or how their choices impact their scores.

CFA and VantageScore created a quiz to test your understanding of credit. You can take it online at, or take it here – the correct answers are at the end.

1. Which of the following service providers may use credit scores to decide whether a person can buy a service and/or what price he or she will pay?

a. Mortgage lender

b. Credit card issuer

c. Cell phone company

d. Electric utility

e. Landlord

f. All of the above

2. On a $20,000, 60-month auto loan, about how much more would a borrower with a bad credit score pay than a borrower with a good report?

a. Under $1,000

b. $1,000-$3,000

c. $3,000-$5,000

d. More than $5,000

3. Which of the following does a credit score mainly indicate?

a. Knowledge of consumer debt

b. Attitude toward consumer debt

c. Amount of consumer debt

d. Risk of not repaying the loan

e. Financial resources to pay back the loan

4. Which of these groupings contains three factors that are all used to calculate a credit score?

a. A person’s age, missed loan payments, and marital status

b. Missed loan payments, high balances on credit cards, and ethnic origin

c. Marital status, high balances on credit cards, and personal bankruptcy

d. A person’s age, high balances on credit cards, and ethnic origin

e. Missed loan payments, high balances on credit cards, and personal bankruptcy

5. Who collects the information on which credit scores are most frequently based?

a. FICO and VantageScore Solutions

b. Three main credit bureaus: Experian, Equifax, and TransUnion

c. Individual lenders

d. Federal government

e. All of the above

6. Does each consumer have just one credit score?

a. Yes

b. No

7. Which of the following is usually a good generic credit score?

a. 400

b. 500

c. 600

d. 700

8. When are lenders that use credit scores required to inform borrowers of the credit score used in the lending decision?

a. After a consumer applies for a mortgage

b. On all credit card, auto, and other consumer loans when a consumer doesn’t receive the best terms and/or lowest interest rate available

c. Whenever a consumer is turned down for a loan

d. All of the above

e. None of the above

9. Which of the following actions helps a consumer raise a low score or maintain a high one?

a. Make all loan payments on time

b. Keep credit card balances under 25 percent of the credit limit

c. Avoid opening several credit card accounts at the same time

d. All of these

e. None of these

10.When will multiple inquiries about getting a mortgage or auto loan lower one’s FICO or VantageScore credit score?

a. Each time one makes an inquiry

b. Only when one makes at least five inquiries

c. Never during a one- to two-week window

d. Never

11. How important is it to check the accuracy of your credit reports at the three main credit bureaus?

a. Very important

b. Somewhat important

c. Not very important

12. When you cannot resolve a complaint to a credit bureau or lender about your credit report or credit score, which of these federal agencies is best suited to help you resolve the problem?

a. Federal Reserve Board

b. Federal Trade Commission

c. Consumer Financial Protection Bureau

d. Department of Justice


1. G: All of the above

2. D: More than $5,000

3. D. Risk of not repaying the loan. While other factors, such as savings and income, may influence repayment risk, the credit scoring models that produce credit scores only consider credit report contents.

4. E: Missed loan payments, high balances on credit cards, and personal bankruptcy. Age, ethnic origin and marital status should not be considered in making credit decisions, and in most cases is against federal and state law to do so.

5. B: Three main credit bureaus: Experian, Equifax, and TransUnion

6. B: No. Consumers have many credit scores. Generic scores, often developed by the three national credit bureaus, are made available by these credit bureaus, by FICO, by some lenders, and by some independent websites (such as,, and These scores give consumers an idea of their general credit risk, whether they can obtain credit, and whether they will be charged subprime rates.

7. D: 700. The most common credit scoring scale range is 300-850. Scores above 700 are usually considered by lenders to indicate low credit risk, while scores below the mid-600s are often considered to indicate some or great risk. Systems that use other scales may consider scores differently.

8. D: All of the above

9. D: All of these. Someone with a good score may lose up to 70-90 points when payments are missed on credit cards or automobile loans, and more than 100 points when a mortgage payment is missed.

10. C: Never during a one- to two-week window. Multiple inquiries during this period are treated as a single inquiry by FICO and most other scoring models.

11. A: Very important. Each of the three main credit bureaus – Equifax, Experian, and TransUnion – is required by federal law to provide a free copy of your credit report once a year upon request. An easy way to get each report is to visit or call (877) 322-8228.

12. C: Consumer Financial Protection Bureau. Log onto or call (855) 411-2372.

For more information about credit or any other real estate-related matters, contact your local Realtor today.

Cher Wollard is a Realtor with Berkshire Hathaway HomeServices Drysdale Properties, Livermore.