Credit Reports/Scores
How often should you check your credit score?
At least monthly
What is the difference between a mean and a median?
A mean is found by adding all numbers in a set and then dividing by the amount of numbers. A median is the middle number.
Where do you find a Schumer Box?
In a credit card offer (whether mailed to you or online)
Name two types of credit card rewards.
Cash back, points toward a future purchase, airline miles
Name all 3 finance charge methods we learned.
1. Unpaid balance
2. ADB without new purchases
3. ADB with new purchases
What are the 3 credit reporting agencies?
TransUnion, Experian, Equifax
What do you do if you are asked to find a median and there is no middle number?
Find the average of the two middle numbers.
Why should you read a Schumer Box carefully?
It tells you all of the rules of that credit card so you are aware of what you are applying for.
What is in the summary box on a credit card statement?
Which of our 3 methods is best for the credit card holder and which is best for credit card companies?
Unpaid balance is best for the credit card holder and ADB with new purchases makes the credit card company the most money.
What is the range for a FICO score?
300-850
What does IQR stand for and how do you find it?
IQR = Interquartile Range
You find it by subtracting Q3 - Q1
How many types of APR are there? Name them.
Introductory APR, Purchases APR, Balance Transfer APR, Cash Advance APR, and Penalty APR.
What two things happen if you only pay the minimum payment?
1. It will take a long time to pay your card off.
2. You will pay up to double the interest.
Sarah had a balance of $1219 on her credit card and made a payment of $750. If her APR is 24.99% what will be her finance charge?
Unpaid balance = 1219-750 = 469
Periodic rate = 24.99 / 12 = 2.0825%
Finance Charge = 469 x 0.020825 = $9.76
What are two examples of things that would be in the public record section of a credit report?
Bankruptcies, tax liens, foreclosure, collections
What percent of data is in the box? In each whisker?
50% in the box, 25% in each whisker
Name two things that could cause you to pay a fee on a credit card.
Paying late, balance transfers, cash advances, going over your credit limit, foreign transactions, annual fee
Why should you pay your credit card bill as soon as it comes instead of waiting for the due date?
How do you find the new balance for method 2 (ADB without new purchases)?
Unpaid balance + finance charge + new purchases
What are the 4 sections of a credit report?
Personal information, credit history, public record, inquiries
Find Q1 and Q3 for this data:
5 7 9 13 13 15 16 17 20 22 25
Median = 15
Q1 = 9
Q3 = 20
State 3 things that will happen if you pay your credit card bill late.
1. You will pay a late fee.
2. You will trigger the penalty APR.
3. It will go on your credit report for 7 years.
4. Your credit score may go down.
Why would someone pay an annual fee for a credit card?
They may believe that the rewards are worth it.
Which months have 31 days in them?
January, March, May, July, August, October, December