Credit Concepts Quiz

What is a credit score?

• A credit score is a numerical representation of an individual's creditworthiness.

• A credit score is a rating given to individuals based on their social media activity.

• A credit score is a measure of how much money a person has in their bank account.

• A credit score is a number that represents a person's popularity among their peers.

What factors can affect your credit score?

• income level, employment history, and age

• number of social media followers, number of pets, and favorite color

• number of siblings, favorite food, and shoe size

• payment history, credit utilization, length of credit history, types of credit used, and new credit inquiries

What is the difference between a credit card and a debit card?

• A credit card allows you to spend money directly from your bank account, while a debit card allows you to borrow money from the bank.

• A credit card and a debit card are the same thing.

• A credit card allows you to borrow money from the bank to make purchases, while a debit card allows you to spend money directly from your bank account.

• A credit card and a debit card can only be used for online purchases.

What is the purpose of a credit report?

• The purpose of a credit report is to provide personal information for marketing purposes.

• The purpose of a credit report is to determine a person's income level.

• The purpose of a credit report is to provide lenders and creditors with information about a person's creditworthiness and ability to repay debts.

• The purpose of a credit report is to track a person's spending habits.

What is the meaning of APR in credit terms?

• Annual Percentage Return

• Annual Percentage Rate

• Annual Percentage Ratio

• Average Percentage Rate

What is the importance of making timely credit card payments?

• To earn rewards points, avoid late payment fees, and reduce interest charges.

• To increase your credit limit, avoid late payment fees, and reduce interest charges.

• To maintain a good credit score, avoid late payment fees, and reduce interest charges.

• To improve your credit score, avoid late payment fees, and reduce interest charges.

What is a credit limit?

• The minimum amount of money that a lender is willing to lend to a borrower.

• The average amount of money that a lender is willing to lend to a borrower.

• The interest rate charged on a loan.

• The maximum amount of money that a lender or financial institution is willing to lend to a borrower.

What is the difference between a secured and an unsecured credit card?

• A secured credit card has a higher interest rate than an unsecured credit card.

• A secured credit card is only available to people with bad credit, while an unsecured credit card is available to anyone.

• A secured credit card requires collateral, while an unsecured credit card does not.

• A secured credit card has a lower credit limit than an unsecured credit card.

What is the concept of credit utilization ratio?

• The credit utilization ratio is the number of credit cards a person has.

• The credit utilization ratio is the total amount of credit available to a person.

• The credit utilization ratio is the interest rate charged on a credit card.

• The credit utilization ratio is the percentage of available credit that is being used.

What are some common credit card fees to be aware of?

• overdraft fees

• monthly maintenance fees

• returned payment fees

• annual fees, late payment fees, balance transfer fees, cash advance fees, and foreign transaction fees