Navigating Credit Scores and Reports

The video introduces Jasmine, a college student hesitant to use credit due to fear and lack of knowledge. It explains the importance of understanding credit reports and scores, detailing the components of a FICO score and how it affects financial opportunities. The video provides tips on improving credit scores, such as maintaining payment history and managing credit utilization. It also advises on building credit history through credit cards and checking credit reports for errors. The video concludes with recommendations for further learning through additional videos and resources.

Why has Jasmine avoided using credit?

• She prefers using cash.

• She doesn't need it.

• She is afraid of it.

• She doesn't know how to apply for it.

What is a credit report?

• A report of your annual income.

• A list of your monthly expenses.

• A detailed history of your credit activities.

• A summary of your bank account balances.

Which company created a simple way to summarize credit information?

• Transunion

• Equifax

• Experian

• FICO

What percentage of your credit score is determined by your payment history?

• 35%

• 15%

• 10%

• 30%

What is the recommended maximum credit utilization to avoid damaging your score?

• 40%

• 30%

• 20%

• 10%

Why should you avoid closing old credit accounts?

• It decreases your payment history.

• It shortens your credit history.

• It adds more recent inquiries.

• It increases your credit utilization.

How do recent inquiries for credit affect your score?

• They increase your score.

• They have no effect.

• They significantly lower your score.

• They slightly lower your score.

What is the easiest way for Jasmine to start building her credit history?

• Apply for a mortgage.

• Get a student or secured credit card.

• Open multiple types of credit accounts.

• Take out a private student loan.

How often should you check your credit report for mistakes?

• Once a month

• Once a year

• Once every six months

• Only when applying for a loan

What should you do if you find an error on your credit report?

• Apply for a new credit card.

• Wait for it to correct itself.

• Contact the credit bureau immediately.

• Ignore it.