Managing Credit- Unit Test

First Name:

Last Name:

Hour/Class:

• 2nd hour
• 4th hour

1. 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

2. 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

3.Which of the following statements about credit scores does this bar graph support?

• Credit scores tend to drop as you grow older because you are more likely to miss a payment at some point
• It is more difficult for young people to borrow because they have less payment history for a lender to rely upon
• When young people borrow, they are likely to have lower interest rates because their credit scores are lower
• It is easier for young people to get loans at lower interest rates because they are likely to have never been late with a payment

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

• Salary of your current job
• Payment history of your car loan
• Credit card payment history
• Student loan activity

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

• Checking your credit card or loan statement
• Talking to a non-profit counselor
• Checking creditkarma.com
• Getting a score from myFICO.com

6. 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

7. 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