Understanding Credit and Insurance Basics

Which of the following is an example of revolving credit?

• Mortgage loan

• Credit card

• Auto loan

• Student loan

What does a credit score primarily represent?

• The amount of money in your bank account

• Your history of repaying borrowed money

• Your annual income

• The number of credit cards you own

Which type of credit is typically used to purchase a home?

• Installment credit

• Revolving credit

• Open credit

• Service credit

Which of the following is NOT a factor in calculating a FICO credit score?

• Payment history

• Amounts owed

• Age of the borrower

• Length of credit history

What is the typical range for most credit scores in the United States?

• 100–500

• 300–850

• 600–1200

• 0–100

Which of the following best describes installment credit?

• Credit that must be paid in full each month

• Credit with a fixed number of payments over time

• Credit with no set repayment schedule

• Credit used only for utilities

Which agency is NOT one of the three major credit bureaus in the United States?

• Equifax

• Experian

• TransUnion

• Federal Reserve

What is the main purpose of a credit report?

• To show your annual income

• To list your employment history

• To summarize your credit history and activity

• To display your tax returns

Which of the following actions can help improve your credit score?

• Making late payments

• Paying bills on time

• Maxing out credit cards

• Ignoring credit card statements

Which type of credit is most commonly associated with a credit limit that can be used repeatedly?

• Installment credit

• Revolving credit

• Open credit

• Secured credit