Managing Credit- Review

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

• Payment history and types of accounts
• Payment history and total debt

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. Which choice will help her pay off debt?

• Taking extra shifts at work to increase her income
• 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

4. Which of the following would show up on a credit report?

• Salary of your current job
• Credit card payment history

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

• 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?

• Make on-time payments
• 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?

• Ask his parents to cosign a credit card or add him as an authorized user on their credit card
• Take out some private student loans, even though he doesn't need them because he has grants and scholarships

8. Which of the following individuals or groups would be the LEAST likely to look at your credit score?

• Credit card companies
• A bank representative who is helping you open a savings account

9. Frank and Jasmere are each shopping for a new car for themselves. Each will need a $20,000 loan 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
• Over the five year period, Frank will pay less because of a lower interest rate

10. You have a credit card that you use regularly for small purchases with the goal of improving your credit score. Which strategy would have the GREATEST positive impact?

• Use less than 30% of the credit limit and pay it off in full every month by the due date
• Put the credit card in a drawer instead and don't ever use it