Credit Scores 1
What are the two most important factors in calculating your credit score?
Payment history and total debt/credit utilization
The higher your credit score the _________ your interest rate on a loan will likely be.
The higher your credit score the LOWER your interest rate on a loan will likely be.
What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?
a. snowball method
b. debt avalanche method
c. high rate method
c. high rate method
What is the potential benefit 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
True or False:
A bank representative who is helping you open a savings account is likely to look at your credit score before letting you sign up.
FALSE
True or False:
The salary of your current job would show up on a credit report.
False:
It is often more difficult for young people to borrow because they have ________ ________ ________ for a lender to rely upon
Little/No Credit History
You have a credit card that you use regularly for small purchases with the goal of improving your credit score. What strategies would have a positive impact on your score.
Use less than 30% of the credit limit and pay it off in full every month by the due date
Making the monthly minimum payments on all your debts, and then putting any extra cash toward the debt with the lowest balance is an example of the ____ ________ method.
debt snowball method
Ulises is paying his credit card bill and student loan payment each month, but he is falling behind on his auto loan payment. Brandon says, "Stop making the credit card payment for a few months until you're caught up on the auto loan." If followed, will this advice lead to a positive or negative impact on his credit score?
Negative impact
"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
Who tracks all of your credit information?
3 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
What are potential consequences of neglecting to pay your federal student loans?
Wages or tax refunds can be garnished
Jalen is 17 years old and wants to begin establishing a credit history. What action could 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 free credit report service is authorized by federal law but only accessible once per year per credit bureau?
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
Alex confides in Rinaldy that he has a low credit score. What is the single best way for Alex to improve his score?
Make on-time payments
Applying for multiple credit cards in a short period of time could have a ________ impact on your credit score.
Applying for multiple credit cards in a short period of time could have a NEGATIVE impact on your credit score.
Wendy 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. Explain a strategy she can follow to meet her goal.
Reduce spending by canceling some of her streaming subscriptions, take extra shifts at work to increase her income, make more than the minimum required payment on her debt...
The amount you can charge to a secured credit card is limited by…
The amount of money you deposit into an account as collateral
How can your credit score impact your financial well-being?
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
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
What range can your credit score fall between?
300-850
Typically what number do you want your credit score to be above?
700
What year did Mr. Perillo graduate high school?
2008
What is the slope-intercept form of a line?
y = mx + b
An exponent can be described as repeated ______________ of a base number.
multiplication
What are the colors of a rainbow in order?
ROY G. BIV
Red, Orange, Yellow, Green, Blue, Indigo, Violet