Basics of managing Credit
What is a credit score?
A credit score is what shows how well you’ve handled past financial obligations.
How frequently can you request and receive a free credit report from each bureau?
3 times per year
What percent of Americans do know their credit score?
64% of Americans know their credit score
In general, nonpayment on what type of loan can lead to wage garnishment?
It would be either private student loans, federal student loans, tax debt, and child support.
What's the most important factor when choosing a credit card?
Intrest rates!
What percent of adults, nationally, have a credit file and score?
88.4% of adults nationally have a credit file and score
How long does a negative item last on your credit report?
7 years
What is the scale for the minimum to maximum possible credit score?
The scale is 300-850 for a credit score
What types of loans could result in the seizure of your property?
A mortgage would be a seizure of property if not paid and also included with tax debt.
When it is a good idea to borrow (take on credit)?
When you need help financially and can still be able to pay that amount back over time
Why might it be important to track your net worth?
By tracking your net worth, you are tracking your wealth
If you review your credit report and find an error, and you’re able to prove it is, indeed, an error, how long does the credit bureau have to remove the error?
They have 6 months to remove it
When it comes to credit scores, why is having a thin file NOT an asset?
You don’t want a thin file because that means you don’t have enough information for your credit history and banks are most likely not to lend you money.
What is the percentage of Millenials that have debt?
86% of millennials have debt
Why it is important to build a credit history from a young age?
Without an established credit history, it becomes more difficult and potentially costlier to get an apartment, a credit card, or a loan.
What can you do at a young age to build good credit?
You can have a parent cosign with your account.
What is the FCRA?
Fair credit reporting act
Name 3 ways you can improve your credit score?
Make a huge debt payment
become an authorized user
ask for a higher credit limit
If you’re using the High Rate Method, how do you organize your debts?
Make a scale to the highest to the lowest interest rates of interest.
Name 3 good habits to have while maintaining credit?
- Saving for an emergency/ Savings account
-Paying bills on time
- Not being careless with your credit
What percent of adults, nationally, have a credit file and score?
88.4% of adults nationally have a credit file and score.
What are the three main credit reporting bureaus?
Equifax, Experian, and TransUnion
What reasons might an 18-year-old have for his/her thin file? What might be a teenager’s realistic next steps in fixing a thin file?
An eighteen-year-old might have a thin file just because they just started building credit. One way to fix this is to invest or start buying assets.
What two types of debt are most common for Millennials?
Education debt is one of the most common debts. Car debt is also another common debt for Millennials.
what is a credit utilization rate?
it's how much you currently owe divided by your credit limit