Credit Unit Test

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

• Payment history and types of accounts
• Payment history and total debt
• Length of credit history and new credit inquiries

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

• Talking to a non-profit counselor
• Checking creditkarma.com
• Getting a score from myFICO.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

Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal?

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

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

• Someone interviewing you for a job
• An insurance company reviewing your applicant for auto insurance
• A bank representative who is helping you open a savings account

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
• Always carry a balance from month to month
• Regardless of how much your balance is, make the minimum payment required on your credit card every month by the due date

What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?

• Snowball method
• Make minimum payments
• High rate method

Who tracks all of your credit information?

• Credit reporting agencies (Equifax, Experian and TransUnion)
• Federal government
• Lenders

What is the general timeline to establish your first credit score?

• As soon as you apply for a credit card or loan
• Six months after you first actively use your credit
• Once you pay all of your credit balances in full

You find an error on your credit report: Your credit card account indicates that you are 60 days late on your payment but you have bank records indicating that you have always made on-time payments. What should you do FIRST?

• Contact the credit card company to have them fix it
• Contact the credit reporting agency
• Wait a few weeks to see if it gets resolved