Intro to Credit/Credit Scores - STUDY GUIDE

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

• Payment history
• Amounts owed
• Length of credit history
• New credit inquiries

Sam is carrying a balance on his credit card of $500. The credit limit on the card is $1,500. What is his utilization rate?

• 0%
• 3%
• 33%
• 50%

Which of the following would appear on a credit report?

• Payment history of your car loan
• Your name, address, and Social Security Number
• Student loan activity
• Credit card payment history
• Name of a lender that you filled out an application for credit.

Which government-run website allows you to download your credit report for free on an annual basis?

• Freecreditreports.com
• Freecreditreport.com
• getcreditreportshere.com
• annualcreditreport.com

Which strategy will help you improve your credit score?

• Make on-time payments
• Check my credit score
• Cancel my credit cards
• Get a car loan

What is one strategy that will help you develop a credit history while still in college?

• Make small payments on your student loans while in college, even though they are not required to be paid back until you leave
• Be sure to keep a portion of your paycheck in a savings account instead of a checking account
• Always say "credit" when asked "credit or debit?" at a store
• Any time you borrow money from your parents, friends, or family, be sure to pay it back promptly

Select all of the following that would check your Credit Score:

• Credit card companies
• Auto loan lenders
• Insurance companies
• Landlords
• Federal student loan office

Mark and Brooks are both shopping for a new car. Mark has a credit score of 700 and Brooks has a score of 550. Which of the following statements is TRUE?

• Over the five year period, Brooks and Mark will pay the same amount for the car loan
• Mark's monthly payment on the auto loan will be about $100 more than Brooks's payment
• Brook's monthly payment on the loan will be about $100 more than Mark's payment
• Lenders are not allowed to charge people different interest rates based on their credit scores

How can your credit score impact your financial situation?

• Consumers with high scores can borrow and those with low scores cannot
• Consumers with low scores get lower interest rates on loans than those with high scores
• Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
• It generally has no impact on your financial situation

Which step will have the greatest impact to improve an individuals credit score?

• Not using more than 30% of the credit limit on your card and paying it off in full every month by the due date
• Spend up to the full credit limit on your card and pay off the bill in full every month on time
• Make the minimum payment required on your credit card every month by the due date
• Put the credit card in a drawer and don't ever use it