MYM Quiz 4.3 and 4.4 (Establishing and Building Credit)

What is a good first step to start building your credit?

• Open a checking account

• Take out a large loan

• Apply for multiple credit cards

• Open a savings account

What is a secured credit card?

• A credit card that is supported by collateral or a deposit

• A credit card with no credit limit

• A credit card with a high interest rate

• A credit card with no income requirement

What is the benefit of having someone co-sign a loan with you?

• They will take on the financial responsibility for the loan

• They will help you build your credit history

• They will pay off the loan for you

• They will provide you with a loan without any interest

What is the most important factor in calculating your credit score?

• The mix of credit types you have

• Your payment history (on time vs. late payments)

• The number of recently opened accounts

• The length of your credit history

What is the best way to keep your credit score healthy?

• Pay bills on time

• Have delinquent accounts

• Exceed account limits

• Get accounts turned over to collection agencies

What is the purpose of a prepaid card?

• To provide a credit limit

• To load with cash for later spending

• To help establish credit

• To secure a loan with a deposit

What should you do before applying for a credit card to build credit?

• Use a prepaid card to establish credit

• Check if the lender will report your payment history to the bureaus

• Apply for multiple cards at once

• Keep a high credit utilization ratio

What can happen if you fall behind on mortgage payments or credit card bills?

• It will not affect your credit score

• It may damage your future ability to borrow money

• It will not affect your future ability to borrow money

• It will lower your interest rates

What is the purpose of checking your credit reports?

• To see if you have been approved for new credit

• To apply for a credit card

• To increase your credit limits

• To check for accuracy and address any problems

What is the impact of applying for too much credit?

• It will not affect your credit score

• It will lower your interest rates

• It will improve your credit history

• It can be seen as high-risk by creditors