Managing Credit Bell Ringer 3

Which of the following categories make up most of your credit score?

• Number of recent hard inquiries

• Average length of your credit history

• Number of active credit accounts

• Payment history and credit utilization

It is best to avoid these in order to improve your payment history…

• Credit cards without a rewards program

• Late payments

• Banks that only offer one type of credit card

• Payments greater than the minimum required

It’s beneficial to use some of your available credit because…

• The interest you’ll be charged goes up for every month you don’t use any credit

• Banks require you to use some form of credit in order to have an account with them

• It shows you can responsibly use credit and builds your credit history

• Employers are less likely to hire you if you don’t have a balance on your credit card

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

• Payment history and types of accounts

• Amounts owed and length of credit history

• 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?

• Checking your credit card or loan statement

• 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

• Check his credit score

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

• Frank's monthly payment on the auto loan will be about $100 more than Jasmere's payment

• Jasmere's monthly payment on the loan will be about $100 more than Frank's payment

• Lenders are not allowed to charge people different interest rates based on their credit scores

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

• Put the credit card in a drawer instead and don't ever use it

Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?

• Paying your bills on-time

• Paying down balances on your credit card accounts

• Decreasing your utilization of credit

• Applying for multiple credit cards

You're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a NEGATIVE impact on your credit score?

• Joanie says, "Call the auto lender and see if you can negotiate a lower monthly payment or some other deal."

• Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."

• Angie says, "Pick up a second job for as long as it takes to accumulate enough money to make all your payments, even if it means losing time with friends and family."

• Betty says, "Cut down to a bare bones budget, where your necessities and your debt repayments take first priority. Cut everything non-essential."