Credit Score Review

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

• Payment history and types of accounts

• Amounts owed and length of credit history

• Payment history and total debt

• Length of credit history and new credit inquiries

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

Your friend confides in you that he has a low credit score. What is the single best way for him to improve his score?

• Cancel his credit cards

• 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?

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

• Ask his parents to cosign a credit card or add him as an authorized user on their credit card

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

• Take out some private student loans, even though he doesn't need them because he has grants and scholarships

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

• Someone interviewing you for a job

• 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?

• 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

• Regardless of how much your balance is, make the minimum payment required on your credit card every month by the due date

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

Who tracks all of your credit information?

• Credit reporting agencies (Equifax, Experian and TransUnion)

• Federal government

• Consumer Financial Protection Board (CFPB)

• Lenders

What is the general timeline to establish your first credit score?

• As soon as you apply for a credit card or loan

• Six months after you first actively use your credit

• Once you pay all of your credit balances in full

• Once you turn 18

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

You're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a NEGATIVE impact on your credit score?

• Joanie says, "Call the auto lender and see if you can negotiate a lower monthly payment or some other deal."

• Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."

• Angie says, "Pick up a second job for as long as it takes to accumulate enough money to make all your payments, even if it means losing time with friends and family."

• Betty says, "Cut down to a bare bones budget, where your necessities and your debt repayments take first priority. Cut everything non-essential."