Understanding Credit and Debt Goals

What is a FICO score used for?

• To determine your annual income

• To assess your creditworthiness

• To calculate your monthly expenses

• To evaluate your savings account balance

Which of the following is a good credit management practice?

• Maxing out your credit cards

• Paying your bills on time

• Ignoring your credit report

• Applying for multiple credit cards at once

What is one strategy for reducing debt?

• Increasing your spending

• Making only minimum payments

• Creating a budget

• Taking out more loans

Which of the following is a financial goal?

• Buying a new car

• Eating out every day

• Watching TV

• Playing video games

What does a high FICO score indicate?

• Poor credit history

• High risk to lenders

• Good credit history

• Low income

Which of the following can negatively impact your credit score?

• Paying off a loan early

• Missing a credit card payment

• Checking your own credit report

• Having a savings account

What is the purpose of setting financial goals?

• To increase stress

• To have a clear plan for saving and spending

• To spend money without limits

• To avoid budgeting

Which of the following is a benefit of reducing debt?

• Increased interest payments

• Improved credit score

• Higher monthly expenses

• More financial stress

What is a common method for managing credit effectively?

• Ignoring credit card statements

• Using credit for all purchases

• Keeping credit card balances low

• Closing old credit accounts

Which of the following is NOT a debt reduction strategy?

• Debt consolidation

• Increasing credit card limits

• Snowball method

• Negotiating lower interest rates