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WorksheetsCredit Review
Total questions: 18
Worksheet time: 52mins
How do banks make money off of the credit they issue?
They charge a large, one-time fee at the start of the loan
They take out a small fee each month from your checking account
They charge a high interest rate on the loan
This is a trick question - they DON'T make money!
Which of the following is NOT a typical type of credit?
Mortgage
Overdraft
Credit Card
Pre-Paid Debit Card
If the collateral for your secured loan can be taken away, why get a secured loan at all?
Because they usually have a higher interest rate
Because they usually have a lower interest rate
Banks give you an extra 90 days to make a missed payment
Banks typically don't charge interest for the first 12 months
What may NOT impact the interest rate on your loans?
Your relationship with the financial institution
Your credit score
The loan amount
Your level of education
True or False: A cosigner's credit history can be affected by the loan they are cosigned on.
True
False
What information on a Schumer Box should you focus on when choosing a credit card? Select ALL that apply.
The term of the credit card
Annual Percentage Rate (APR)
Grace Period
Fees
How do you avoid paying interest on your credit card (or any other loan for that matter)?
Always make the minimum payment over time
Pay interest 1st, then pay what you can on leftover balance
Always make the full payment on time
Pay the principal 1st, then pay what you can on interest
Which is TRUE when you make only the minimum payment each month?
You are charged interest on the remaining balance
Your credit line is restored to its maximum amount
Credit card companies have permission to sell your information
It is the fastest way to pay off your debt
How can you build a positive credit history as a college student?
Get a credit card but don't use it to avoid more debt
Spend up to your credit limit each month
Become an authorized user on an adult's card
Make only the minimum payment each month
Which of the following is TRUE about a credit report?
It is a complete history of one type of credit you have
Credit reports are maintained by the 5 main credit bureaus
You can get a copy of your credit report for free
You can get a credit report only when you're 21 years old
Which of the following does NOT contribute to your credit score?
Your payment history
Which banks issued your credit cards
Your debt-to-credit ratio
Length of credit history
All of the following are benefits of having a good credit score EXCEPT... (Select ALL that apply.)
You can get a higher return on your Retirement fund
Higher interest rate on credit cards and loans
Easier approval for rental apartments and houses
Better car insurance rates Better car insurance rates
Which of the following is TRUE about finding errors on your credit report?
You may have to file a dispute with each credit bureau
You should wait until the end of the month before reporting
Finding errors is common & is not a big deal
Overlooked errors may result in you paying a fine
Why might someone have a thin file? Select ALL that apply.
They've had multiple lines of credit open for 15 years
They only have 4 types of credit open
The credit bureaus mistakenly think you have passed away
You are relatively new to establishing credit
How are a credit score and credit report related?
A credit report is determined by the factors in your score
A credit score is determined by the factors in your report
Credit reports are less important than your credit score
They're not related at all
How can having a thin file impact you?
You are likely to get lower interest rates on your loans
You may be offered new lines of credit in the mail
Lenders may decline your application for a loan
Most landlords will approve you to rent an apartment or home
All of the following may access your credit report EXCEPT...
A landlord
A future employer
Colleges and universities
Insurance companies Insurance companies
Jim is 23 and has 1 credit card. What would be the best way to improve his credit score? Select ALL that apply.
Get 4 more credit cards in the next 3 months
Diversify his credit - get an loan for the car he needs
Make sure he makes his payments in full & on time
Increase his credit utilization rate
