Understanding Credit Scores

A credit score is (choose all that are correct)

• a quick way for lenders to see if you are a good credit risk

• represents the information in your credit report with a three digit number

• is based on years of data about someone's bill paying behavior

• is a reliable predictor of who is and is not likely to repay a loan

If your credit score is low (choose all that are correct)

• you will pay higher finance charges (interest)

• you may not be approved for loans

• you look better to lenders

• you will pay lower finance charges (interest)

The information in your report does not change much from month to month unless you do something different or something happens.

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Your credit score determines whether you will be likely to receive a loan.

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Just because you have good credit doesn't mean you will automatically receive the best credit terms.

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You should shop around for the best interest rates just like you would shop around for the best price on an item.

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All finance contracts are the same, so you do not need to read all of every one you sign.

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You usually have to pay one of the major credit reporting agencies (CRAs) to find out your score.

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The three different credit bureaus (people who keep track of your credit history) all have the same information about your credit/payment history.

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Your credit score will always be the same for all three credit bureaus.

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