Managing Credit

How can you build a positive credit history as a college student?

• Get a credit card but don't use it to avoid more debt

• Spend up to your credit limit each month

• Become an authorized user on an adult's card

• Make only the minimum payment each month

T/F: A negative credit event (bankruptcy) can have a WORSE impact on a higher credit score.

• True

• False

Which of the following is TRUE about a credit report?

• It is a complete history of one type of credit you have

• Credit reports are maintained by the 5 main credit bureaus

• You can get a copy of your credit report for free

• You can get a credit report only when you're 21 years old

Which of the following does NOT contribute to your credit score?

• Your payment history

• Which banks issued your credit cards

• Your debt-to-credit ratio

• Length of credit history

_________ is a measure of how good you are at repaying your debts

• Credit Score

• Credit Grade

• Credit Card

• Banking Score

Three consumers each purchase the same computer for $1,000. They each use the same type of credit card, with all the same policies and conditions, to purchase the computers. The credit card terms provide for an annual percentage rate (APR) of 18%. Consumer 1 pays the minimum payment each month until, after two years, the balance is paid off. Consumer 2 pays no money the first three months, but then pays the entire amount off in the fourth month. Consumer 3 pays off the entire balance in the first month.
Which statement best describes the results of the consumers’ actions? MCM.3.3

• Consumer 1 will pay the least amount of money by only paying the minimum payment each month.

• Consumer 2 will pay the least amount of money by paying nothing during the first three months but paying the balance in the fourth month.

• Consumer 3 will pay the least amount of money because there will be no interest charges.

• Consumers 1, 2, and 3 will each pay the same amount of money: $1,000.

The risk of ending up with the equivalent of a never-ending loan is one of the disadvantages of using:

• checking accounts

• savings accounts

• credit cards

• debit cards

Which one is an example of Informal Source of Credit

• Banks

• Cooperative Societies

• Money Lender

• All of these

Which of the following is true about open-ended, or revolving, credit accounts?

• Once you pay it off you no longer can use it

• Once you pay it off you can still use it

• Once you pay it off you can only use it for another year

• Once you pay it off you can use it for free with unlimited credit

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

• Salary of your current job

• Credit card payment history