WorksheetsManaging Credit - Unit 5
Total questions: 20
Worksheet time: 20mins
What are the two main factors in calculating your credit score?
Payment history and types of accounts
Amounts owed and length of credit history
Payment history and total debt
Length of credit history and new credit inquiries
Marco wants to pay off his debt as soon as possible. All of the following would help EXCEPT…
Reducing spending by canceling some streaming subscriptions
Taking extra shifts at work to increase his income
Making more than the minimum payment on debt
Applying for another credit card to use if he runs out of cash
How does your credit score affect you financially?
Only people with high scores get credit
People with low scores get lower interest rates than those with high scores
Your credit score affects loan approval and interest rates
It does not affect your finances
Carmine and Lisa each need a $20,000 car loan for five years. Carmine's credit score is 750 and Lisa's is 610. Which statement is TRUE?
Lisa and Carmine will pay the same amount for the loan
Carmine's monthly payment will be about $100 more than Lisa's
Lisa's monthly payment will be about $100 more than Carmine's
Lenders cannot charge different interest rates based on credit scores
Which strategy helps you pay the least interest when paying off multiple debts?
Snowball method
Make minimum payments
High rate method
Consolidate debts into one loan
Who keeps track of your credit information?
Credit reporting agencies (Equifax, Experian and TransUnion)
Federal government
Consumer Financial Protection Board (CFPB)
Lenders
What should you have ready when contacting a credit reporting agency to report an error?
Your preferred payment method to pay for fixing the error
A list of all your financial accounts and balances
An explanation of the mistake and any evidence you have
References from a non-family member vouching for your creditworthiness
Which of the following could lower your credit score if done quickly?
Paying your bills on-time
Paying down your credit card balances
Using less of your credit
Applying for several credit cards
What is the Debt Snowball method?
Pay only your smallest debt first, then the next smallest, and so on
If your debt gets out of control, hire a credit counselor
Pay minimums on all debts, then extra money to the highest balance
Pay minimums on all debts, then extra money to the lowest balance
What can happen if you don't pay your federal student loans?
Wages or tax refunds can be garnished
Passport revocation
Driver’s license suspension
Termination from your job
What are the benefits of having a cosigner on a loan?
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 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
Why is it best to start building credit when you're young?
Credit gets more expensive as you age
Negative marks disappear faster for young people
Credit scores are free for those under 25
You may need credit history to rent, buy a car, or get a credit card
Review this credit report and choose the response that correctly describes the information shown.
The borrower paid a $30 fee in February 2015
This borrower was never late with any of their credit payments
This borrower's most recent payment was $30
This borrower was 30 days late on their May 2015 payment
The amount you can charge to a secured credit card depends on…
Your credit score
The amount of money you deposit as collateral
The total money in your bank accounts
How long you’ve had an account
Which of the following would NOT appear on a credit report?
Salary of your current job
Payment history of your car loan
Credit card payment history
Student loan activity
Why do older people often have higher credit scores?
They have had more time to accumulate wealth
They have paid more taxes
They always earn more than younger individuals
They have longer credit histories
The main benefit of a secured credit card is:
High spending limits
Reduced annual fees
Improving credit score
Earning cashback rewards
Which type of debt usually cannot be erased or reduced?
Federal student loans
Credit card debt
Medical bills
None of these
What is included on a credit report?
Medical insurance information
Parents' and siblings' contact information
Education level
Inquiries for new credit
How long does bankruptcy stay on a credit report?
3-5 years
7-10 years
12-15 years
Indefinitely (Forever)
