Question

In analyzing a borrower’s credit worthiness, the lender will typically examine the borrower’s FICO score (a product developed by the Fair Isaac Corporation). High-quality (prime) borrowers are those with a credit score above ________.

Answer 1

A prime borrower will have a FICO score of 650+

Explanation:

A FICO score is a credit rating/scoring framework, given by Fair Isaac corp., that can be used by potential lenders to analyse the credit worthiness of a borrowing individual and determine whether to extend credit or not. It is based upon 5 distinct factors which are Payment history, types of credit used, level of indebtedness, period of credits, new credit accounts.

The FICO score ranges from 300-800+ and a borrower with a score of 650+ is considered a Prime borrower, and pose a lesser threat of defaulting in payments.