Financial Counseling Certification Program (FiCEP) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Financial Counseling Certification Program. Use our test with multiple choice questions and explanations to boost your confidence and excel in your exam. Start today!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is one of the largest influences on an individual's credit score?

Length of credit history
Types of credit accounts
Payment history
Debt-to-income ratio

The correct answer is: Payment history

Payment history is indeed one of the largest influences on an individual's credit score because it reflects the reliability of the borrower in repaying debts. Lenders and credit scoring models regard payment history as a critical measure of creditworthiness. Consistently making on-time payments demonstrates financial responsibility and lowers the perceived risk for lenders, which can significantly enhance a borrower’s credit score. In contrast, late payments, defaults, or bankruptcies can severely damage the score, impacting an individual’s ability to acquire credit in the future. Factors like the length of credit history, types of credit accounts, and debt-to-income ratio are important, but their influence on the score is not as pronounced as that of payment history. The payment history accounts for a significant percentage of the total credit score calculation, hence its central role in shaping an individual's overall credit profile.