Credit Score
What is a highest credit score you can have?
850
Should you get your own credit card or become authorized under your parents' credit card?
Both
Which percentage is ideal for a credit utilization rate?
25%-30%
At least once per year, but consider doing it quarterly or monthly to be safe.
How does your credit score affect your ability to borrow money?
It can lead to higher interest rates.
When is it a good idea to take on credit?
Does paying early help your credit score?
No
What are consequences for not paying off your debts?
Repossession, wage garnishment, bad credit score and history.
What is a benefit of building credit early?
You will have a headstart on your credit report.
What is the ideal percentage of credit used on a monthly basis?
Ideally, 10-20%.
What is a credit score?
A number that lenders use to make sure that you are a good person to lend money to and to help make sure you will pay it back on time.
Should you consign somebody else's credit card?
It is not recommended
What is the snowball method for taking care of loans?
Paying the minimum on all of the loans and then paying off the smallest one so that it will be gone.
What type of loans interest doesn't change over time?
Fixed-rate loan.
What is it called when a lender takes money directly from your paycheck?
Wage Garnishment
How can you improve your credit?
Paying bills on time and in full is key to maintaining a good credit score. Paying loans and paying off your credit card in full payments will help as well.
Does closing credit cards help raise your score?
No
What is the High Rate (Avalanche) method?
Paying all of the minimum payments on smaller loan and taking the extra money and paying off the loan with the biggest interest.
What should you ask yourself before purchasing something with credit?
Does the minimum payment fit into my monthly budget?
Can I save instead of borrow?
Is it worth the added interest that will come with this credit?
When should you check your credit score?
When you're applying for a credit loan.
What are the five components of your credit score?
Payment history
amount owed
length of credit history
new credit
credit mix.
Why is building credit early important?
It shows that you have created a responsible spending plan and you have developed good credit habits
What is a consolidation loan?
What are the consequences of having a thin file?
The lender will not know whether you are trustworthy or not.
What is the consequence for having a thin file area?
Not having enough information to generate a credit score