Managing Credit Bell Ringer 4

All of the following purchases can be impacted by your credit report EXCEPT…

• Getting your own cell phone plan

• Leasing an apartment

• Applying for a mortgage to buy a house

• Buying a TV with cash

Jane needs a cosigner for her loan. Which person would be the best for her to ask to be her cosigner?

• Her cousin, who has several fancy cars and must be rich

• Her grandfather, who lives on a tight budget

• Her sister, who shows her she has a credit score of 735

• Her neighbor, who says sharing the loan will allow him to remodel his garage at the same time

How does the interest rate on a loan compare for someone with excellent credit compared to someone with poor credit?

• Interest rates are the same regardless of credit score

• Interest rates are lower for someone with excellent credit

• Interest rates are higher for someone with excellent credit

• Interest is not charged for someone with excellent credit

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

• Any time he borrows money from a friend or family member, be sure to pay it back promptly

• Take out some private student loans, even though he doesn't need them because he has grants and scholarships

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

• Once you turn 18

What benefits do you receive by taking out a loan with a cosigner?

• You don’t get penalized for late payments

• You get a discount on future loans after this one is paid off

• You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit

• You automatically get the same credit score as the cosigner once the loan is paid off

Which response best completes the sentence 'It's best to begin establishing credit when you're young because ________'?

• Accessing credit only becomes more expensive as you get older

• Negative marks on your credit report go away faster for younger borrowers

• Credit scores are free for anyone under the age of 25

• You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card

The amount you can charge to a secured credit card is limited by…

• Your credit score

• The amount of money you deposit into an account as collateral

• The total amount of money across all your bank accounts

• How long you’ve had an account with the bank