Money Matters Unit 5 Test Review

What are the two most important factors in calculating your credit score?

• Payment history and total debt

• Amounts owed and length of credit history

• Payment history and types of accounts

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…

• 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

All of the following would show up on a credit report EXCEPT...

• Student loan activity

• Salary of your current job

• Payment history of your car loan

Which of the following methods of getting your credit score would involve paying a fee?

• Getting a score from myFICO.com

• Talking to a non-profit counselor

• Checking your credit card or loan statement

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

• Get a car loan

• Check his credit score

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

• Always say "credit" when asked "credit or debit?" at a store

• Any time he borrows money from a friend or family member, be sure to pay it back promptly

Which of the following individuals or groups would be the LEAST likely to look at your credit score?

• A bank representative who is helping you open a savings account

• Credit card companies

• Someone interviewing you for a job

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?

• Use less than 30% of the credit limit and pay it off in full every month by the due date

• Always carry a balance from month to month

• Put the credit card in a drawer instead and don't ever use it

What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?

• Snowball method

• Make minimum payments

• High rate method

Who tracks all of your credit information?

• Federal government

• Credit reporting agencies (Equifax, Experian and TransUnion)

• Lenders