Mathematics Homework Help

Lenders primarily use the Fair Isaac Corporation (FICO) model to determine credit scores. FICO grades consumers on a 300- to 850-point range; a higher score indicates less risk to the lender. A score of 800 or higher is considered exceptional; 740 to 799 is very good; 670 to 739 is good; 580 to 669 is fair; and 579 or lower is poora) Using the loan rate available to someone with a FICO credit score of 780, calculate the monthly payment and total paid over the life of a $250,000 30-year fixed-rate mortgage for someone with this credit score.

b) Now, calculate the monthly payment and total paid using the loan rate available to someone with a FICO credit score of 640.

c) Calculate the difference in monthly payment for someone with a very good credit rating (780) with someone who has a low credit rating (640).

d) Find the total amount of interest paid for someone with a very good credit rating (780) AND for someone who has a low credit rating (640).

e) How much more interest will someone with a 640 credit score pay than someone with a 780?

f) Write a few sentences stating and explaining at least two ways to improve a credit score.

g) Write a few sentences stating and explaining at least two ways to hurt your credit score.