Category 1
What are the two most important factors in calculating your credit score?
Payment history and total debt
Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT…
Reducing spending by canceling some of her streaming subscriptions
Taking extra shifts at work to increase her income
Making more than the minimum required payment on her debt
Applying for another credit card to use in case she runs out of cash paying off her debt
Applying for another credit card to use in case she runs out of cash paying off her debt
All of the following would show up on a credit report EXCEPT...
Salary of your current job
Payment history of your car loan
Credit card payment history
Student loan activity
Salary of your current job
Which of the following methods of getting your credit score would involve paying a fee?
Getting a score from myFICO.com
Your friend confides in you that he has a low credit score. What is the single best way for him to improve his score?
Make on-time payments
Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal?
Ask his parents to cosign a credit card or add him as an authorized user on their credit card
Which of the following individuals or groups would be the LEAST likely to look at your credit score?
Someone interviewing you for a job
A bank representative who is helping you open a savings account
Credit card companies
An insurance company reviewing your applicant for auto insurance
A bank representative who is helping you open a savings account
You have a credit card that you use regularly for small purchases with the goal of improving your credit score. Which strategy would have the GREATEST positive impact?
Always carry a balance from month to month
Regardless of how much your balance is, make the minimum payment required on your credit card every month by the due date
Use less than 30% of the credit limit and pay it off in full every month by the due date
Put the credit card in a drawer instead and don't ever use it
Use less than 30% of the credit limit and pay it off in full every month by the due date
What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?
High rate method (Avalanche)
Who tracks all of your credit information?
Credit reporting agencies (Equifax, Experian and TransUnion)
What is the general timeline to establish your first credit score?
Six months after you first actively use your credit
You find an error on your credit report: Your credit card account indicates that you are 60 days late on your payment but you have bank records indicating that you have always made on-time payments. What should you do FIRST?
Contact the credit card company to have them fix it
Which of the following things should you have ready when contacting a credit reporting agency to report an error on your credit report?
An explanation of the mistake and any evidence you have supporting your claim
Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?
Paying your bills on-time
Paying down balances on your credit card accounts
Decreasing your utilization of credit
Applying for multiple credit cards
Applying for multiple credit cards
What best describes the Debt Snowball method for paying off debt?
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
Which of these represents a potential consequence of neglecting to pay your federal student loans?
Wages or tax refunds can be garnished
Passport revocation
Driver’s license suspension
Termination from your job
Wages or tax refunds can be garnished
What benefits do you receive by taking out a loan with a cosigner?
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
What best completes the sentence "It's best to begin establishing credit when you're young because ________" ?
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
The amount you can charge to a secured credit card is limited by…
The amount of money you deposit into an account as collateral
Which free credit report service is authorized by federal law but only accessible once per year?