MP. Types of Credit. SY 24/25

Multiple Choice

What is credit?

• An arrangement where goods, services, or money is received in exchange for a promise to repay at a later date.

• A system where goods are exchanged for other goods without using money.

• A method of saving money for future use.

• A type of investment in stocks and bonds.

Multiple Choice

Why is building and maintaining good credit crucial?

• It helps in getting a job.

• It is essential for financial success.

• It ensures better health.

• It guarantees a higher education.

Multiple Choice

When I apply to borrow money for a car, the loan company will most likely look at my credit history.

• True
• False

Multiple Choice

Which of the following is TRUE about a credit report?

• It is a complete history of one type of credit you have

• Credit reports are maintained by the 5 main credit bureaus

• You can get a copy of your credit report for free

• You can get a credit report only when you're 21 years old

Multiple Choice

The credit score ranges form 

• 300-800
• 250-950
• 350-900
• 300-850

Multiple Choice

What are the three major types of credit?

• Installment Credit, Revolving Credit, Open Credit

• Fixed Credit, Variable Credit, Flexible Credit

• Personal Credit, Business Credit, Government Credit

Multiple Choice

What is a key benefit of using installment credit?

• Flexible payments

• Builds good credit history

• Ongoing access to funds

Multiple Choice

How does revolving credit differ from installment credit?

• Revolving credit has a fixed number of payments

• Revolving credit allows you to borrow, repay, and borrow again

• Installment credit is used for smaller purchases

Multiple Choice

What are the risks associated with open credit?

• Long-term commitment

• Service shut-off if not paid

• Limited credit limit

Multiple Choice

Revolving credit is always safer than installment credit.

• True

• False

Open Ended

What type of credit should Jasmine consider for buying a used car and why?