Credit Knowledge

What are the different types of credit?

• secured credit, unsecured credit, line of credit, and trade credit

• personal credit, business credit, mortgage credit, and student credit

• credit card, debit card, prepaid card, and charge card

• revolving credit, installment credit, open credit, and closed credit

Name one credit management strategy.

• Create a budget and stick to it.

• Pay off all debts immediately

• Ignore credit card statements

• Max out credit cards

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

Which agencies are responsible for credit reporting?

• Equifax, FICO, and TransUnion

• Equifax, Experian, and TransUnion

• Equifax, Experian, and FICO

• FICO, Experian, and TransUnion

What is credit utilization?

• Credit utilization is the ratio of your credit card balances to your credit card limits.

• Credit utilization is the interest rate on your credit card balances.

• Credit utilization is the number of credit cards you have.

• Credit utilization is the total amount of credit available to you.

How does a credit card work?

• A credit card allows the cardholder to borrow funds from a financial institution to make purchases.

• A credit card is a type of loan that must be paid back in full within 24 hours.

• A credit card is a prepaid card that can only be used for online purchases.

• A credit card is a form of identification used to access personal bank accounts.

What is the difference between secured and unsecured credit?

• Secured credit is backed by collateral, while unsecured credit is not.

• Secured credit is only available to individuals with a high credit score.

• Secured credit has a higher interest rate than unsecured credit.

• Secured credit requires a co-signer, while unsecured credit does not.

What are the consequences of late credit card payments?

• Consequences of late credit card payments include high interest charges, late fees, damage to credit score, and potential legal action.

• Consequences of late credit card payments include rewards and cashback offers, improved credit score, and lower interest rates.

• Consequences of late credit card payments include waived late fees, increased credit score, and improved credit limit.

• Consequences of late credit card payments include increased credit limit, improved credit score, and lower interest rates.

How can you improve your credit score?

• Pay bills late, increase credit card balances, apply for new credit frequently, close old accounts, and never check credit report

• Pay bills on time, reduce credit card balances, limit new credit applications, keep old accounts open, and check credit report regularly.

What is a credit limit?

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

• The interest rate charged on a loan.

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

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