Intro to Credit/Credit Scores - STUDY GUIDE

Imagine you're applying for a mortgage. What are the two most important factors the bank will look at in calculating your credit score?

• Payment history

• Amounts owed

• Length of credit history

• New credit inquiries

What information is typically included in a credit report?

• The interest rates on your mortgage

• Your employment history and salary

• Records of your credit card payments

• Your physical characteristics, such as height and weight

• Details of your savings account balance

What is the official site to obtain a free annual credit report from the three major credit bureaus?

• creditreportfreeannual.com

• annualcreditreport.com

• freecreditannualreport.com

• mycreditreportannualfree.com

What is a beneficial action for Bob to take if he wants to increase his credit score before applying for a home loan?

• Open several new credit cards at once

• Consistently pay bills on time

• Max out his credit card limits

• Ignore his credit report errors

Which of the following is a good practice for a college student wanting to build a positive credit history?

• Applying for a credit card and making small, manageable purchases that can be paid off each month

• Withdrawing and spending your entire student loan amount as quickly as possible

• Paying for all expenses in cash to avoid debt

• Ignoring bills and fees since they are small and seemingly insignificant

Identify all entities that might require access to your Credit Report:

• Mortgage lenders

• Credit card issuers

• Insurance Companies

• Utility companies

• Scholarship committees

If Jamie has a credit score of 620 and Alex has a credit score of 750, who is likely to receive a lower interest rate on a car loan?

• Jamie will receive a lower interest rate because of his lower score.

• Alex will receive a lower interest rate due to his higher credit score.

• Both will receive the same interest rate regardless of their credit scores.

• Interest rates on car loans are determined by the type of car, not the credit score.

What effect does a good credit score have on loan interest rates?

• A good credit score guarantees loan approval regardless of other financial factors

• A good credit score typically results in higher interest rates on loans

• There is no correlation between credit scores and loan interest rates

• Individuals with good credit scores often receive lower interest rates on loans

What action can significantly boost your credit score over time?

• Applying for multiple new credit cards within a short period

• Consistently paying your credit card bill in full before the due date

• Transferring your balance to a new card with a 0% APR offer

• Maximizing your credit card spending to earn rewards

What are the names of the three Credit Bureau's that track all of your credit information?