Credit Essentials Test

What are the two main types of credit?

• Installment and revolving credit
• Secured and unsecured credit
• Good and bad credit
• Personal and business credit

Which of the following is an example of installment credit?

• Credit cards
• Student loans
• Home equity line of credit
• Payday loans

What is the range of credit scores?

• 100 to 500
• 200 to 700
• 300 to 850
• 400 to 900

Which of the following factors does NOT influence credit scores?

• Payment history
• Credit utilization ratio
• Length of credit history
• Number of social media followers

How often should you check your credit report?

• Every month
• Every year
• Every 5 years
• Never

What can happen if you only pay the minimum balance on a credit card?

• Your credit score will improve
• You will avoid interest charges
• You may end up paying more in interest
• Your credit limit will increase

What is the purpose of the Fair Credit Reporting Act (FCRA)?

• To ensure accuracy and privacy of credit information
• To regulate interest rates on credit cards
• To provide free credit reports to consumers
• To protect consumers from identity theft

What should you consider before applying for a credit card?

• Interest rates and fees
• The color of the card
• The card's brand logo
• The card's expiration date

What is a soft inquiry?

• A credit check that does not affect your credit score
• A credit check that lowers your credit score
• A credit check that only occurs when you apply for a loan
• A credit check that is visible to everyone

What is a hard inquiry?

• A credit check that does not affect your credit score
• A credit check that lowers your credit score
• A credit check that only occurs when you apply for a loan
• A credit check that is visible to everyone