Managing Credit Quiz

What are two questions you could ask yourself before making a purchase with a credit card?

• Do I need this

• Can I actually afford this?

• Is it on sale?

• Do I have enough available credit to buy this?

List two benefits of having good credit.

• The higher your credit score, the wealthier you are.

• Banks compete over you

• Lower interest rates

• You earn more interest

True/False: Credit utilization is not important when evaluating your available credit.

• True

• False

Why is it important to review your credit report on a regular basis?

• To see how much interest you've earned

• To check your payment history

• To see what your available credit it

• To check for fraud

True/False: Most Americans have large amounts of money in their savings accounts and hardly any debt.

• True

• False

List two ways people can easily get into debt:

• Not keeping a budget

• Paying yourself first

• Not having an emergency fund

• Staying under 30% credit utilization

Which popular strategy for paying down debt starts by paying off the debt with the smallest balance?

• Avalanche

• High Rate

• Snowball

• Envelope Method

Which popular strategy for paying down debt starts by paying off the debt with the highest interest rate?

• Zero Based

• High Rate/Avalanche

• Snowball

• Envelope Method

True/False: A payday loan is the best way to access money for paying down debt.

• True

• False

A credit score is divided into five categories. Which of the five listed makes up the biggest category at 35%?

• New credit

• Length of credit history

• Amounts owed

• Payment history

• Types of credit