Financial Algebra: Unit 4: Managing Credit

What are the two most important factors in calculating your credit score?

• Payment history and type of account

• Amounts owed and length of credit history

• Payment history and amounts owed

• Length of credit history and new credit inquiries

What general conclusion can you draw from this bar graph?

• 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 (i.e., get a loan) 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

Tags

CCSS.8.SP.A.1

Sam is carrying a balance on his credit card of $500. The credit limit on the card is $1,500. What is his utilization rate?

• 0%

• 3%

• 33%

• 50%

Tags

CCSS.6.RP.A.3C

Which of the following would NOT appear on a credit report?

• Salary of your current job

• Payment history of your car loan

• Credit card payment history

• Student loan activity

Your teacher tells you about the importance of checking your credit report. Which government-run website allows you to download your credit report for free on an annual basis?

• Freecreditreports.com

• Freecreditreport.com

• getcreditreporthere.com

• annualcreditreport.com

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

Which of the following will help you begin developing a credit history before you graduate from college?

• Always say "credit" when asked "credit or debit?" at a store

• Make small payments on your student loans while in college, even though they are not required to be paid back until you leave

• Any time you borrow money from your parents, friends, or family, be sure to pay it back promptly

• Be sure to keep a bit of your paycheck in a savings account instead of a checking account

Each of the following is likely to check your credit score EXCEPT?

• Credit card companies

• Auto loan lenders

• Landlords

• Federal student loan office

Frank and Jasmere are both shopping for a new car. They are looking for a $20,000 loan to pay for the new car that they will pay back over a five year period. Frank has a credit score of 730 and Jasmere has a score of 600. Which of the following statements is TRUE?

• Over the five year period, Jasmere and Frank will pay the same amount for the car loan

• Frank's monthly payment on the auto loan will be about $100 more than Jasmere's payment

• Jasmere's monthly payment on the loan will be about $100 more than Frank's payment

• Lenders are not allowed to charge people different interest rates based on their credit scores

Tags

CCSS.8.F.A.2

CCSS.HSF.IF.C.9

How can your credit score impact your financial situation?

• Consumers with high scores can borrow and those with low scores cannot

• Consumers with low scores get lower interest rates on loans than those with high scores

• Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be

• It generally has no impact on your financial situation