Credit Basics
What is the highest possible credit score?
850
What’s the minimum payment on a credit card?
The lowest amount you must pay to avoid late fees
What kind of loan do most students take out for college?
Student loan
What’s one way to build credit without a credit card?
Pay bills on time, secured credit card, rent reporting
True or False: You should avoid having any credit cards to keep a good score.
False-you need a responsible credit history to build your credit score
What three-digit number shows how risky you are to lenders?
True or False: Paying only the minimum balance each month helps you avoid interest.
False
True or False: Private student loans typically have higher interest rates than federal loans.
True
What percent of your available credit should you use to keep your score high?
Under 30%
True or False: Closing old credit cards always helps your credit score.
False – closing cards can hurt by lowering your credit history length
True or False: Checking your own credit score lowers it.
False
What is APR?
Annual Percentage Rate, the cost of borrowing
What’s it called when you combine multiple loans into one payment?
Consolidation
What’s an emergency fund?
Myth or Fact? “Checking your credit score lowers it.”
It’s a myth – only hard inquiries, like applying for a loan, affect it. Checking your own score is safe
Name one factor that makes up the largest portion of your credit score.
Payment History
What happens if you go over your credit limit?
Fees and potential credit score damage
What type of loan uses your car or house as collateral?
Secured loan
What’s the difference between a debit and a credit card?
Debit pulls from your bank; credit borrows from the lender
Truth or Myth? “Carrying a balance on your credit card improves your credit.”
Myth – paying in full shows responsibility and avoids interest
What is considered a “good” credit score range?
670 to 739
Name 2 benefits of using a credit card responsibly.
Building credit, rewards, fraud protection, etc.
What does “default” on a loan mean?
Failure to make payments as agreed
What’s one consequence of not paying a bill that gets sent to collections?
Hurts credit score, fees, difficulty getting loans
True or False: Your GPA in college affects your credit score.
False – your credit score is based on financial behavior, not academics