Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What term is used when lenders leave a record on your credit file after you apply for a loan?

1. Entry

2. Indicator

3. Mark

4. Record

The correct answer is: Mark

The term "mark" in the context of credit files refers to the notation or record left by lenders when an individual applies for a loan. This mark indicates to future lenders that a credit inquiry has occurred, which can impact the borrower’s credit score temporarily. When you apply for a loan, the lender performs a credit check, which is noted as a hard inquiry or a mark on your credit report. Multiple inquiries in a short period may indicate to lenders that you are seeking credit and may affect their lending decisions. The term is commonly used in the industry to describe this action, clearly distinguishing it from other potential descriptors like "entry," "indicator," or "record," which do not specifically convey the same connotation in relation to credit inquiries. Understanding this terminology is crucial for consumers as it helps them manage their credit health and be aware of how loan applications affect their credit scores.