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WorksheetsEVERFI Build: Credit Fundamentals™ Acquiring Credit All Lessons
Total questions: 40
Worksheet time: 20mins
Which of these are long-term impacts of having a good credit history?
It lets you buy the things you want like clothes or cellphones.
It gives you freedom to shop around for the best deal on tech.
It prevents you from spending money on things you want instead of things you need.
It’s easier to pay for major purchases like cars, houses, and education.
Which type of card impacts your credit history?
Debit card
Student credit card
Driver’s License
State ID Card
Which action could help improve your credit history?
Leave credit card bills outstanding.
Always pay your credit card bill on time.
Only get a debit card and avoid credit cards.
Make a major purchase that you can't afford right now.
What is the correct definition for the grace period?
The amount you pay for your card each year
The amount of time you have to make late payments
The time between when you make a purchase using the credit card and the date when the credit card company begins charging you interest
The amount of time you have to pay your secured deposit
Why is it important to find a credit card with a lower APR?
A lower APR means you have more time to pay off your balance.
A lower APR gives you a better credit history.
A lower APR impacts your grace period.
A lower APR means you pay less in interest.
Why do lending and credit card companies use a borrower's Social Security number when opening an account?
To withdraw taxes
To assign an interest rate
To protect against fraud
To ensure borrowers are US citizens
What is the reason to pay more than the minimum payment due on your credit statement each month?
You save money on interest.
It takes more time to pay off a balance.
It hurts your creditworthiness.
Your credit utilization rate stays the same.
Which statement is correct about Annual Percentage Rate (APR)?
It has nothing to do with how much interest you pay.
It is the interest rate you pay on balances you carry over from month to month.
It stands for Amortized Percentage Rate.
It is better for the borrower if the rate is higher.
What statement is correct about grace periods?
Every credit card has a grace period.
You are charged interest during the grace period.
A short grace period is better for the borrower.
A grace period is the time between making a purchase and when the company begins charging you interest.
Which is the best strategy for paying your credit card bill?
Make no monthly payments at all.
Pay the minimum payment every month.
Pay half the balance every month.
Pay the entire balance every month.
Which action is best if you suspect you're the victim of identity theft?
Check your credit report
Change your email address
Get a PO box
Change your phone number
How can you spot identity theft by looking at the personal section of your credit report?
If you see hard inquiries
If you see credit lines that you have opened
If you see your accounts
If you see an address that isn’t yours
What does an account you don't recognize on your credit report mean?
You’re not the victim of identity fraud.
You may be the victim of identity fraud.
Your credit report is valid.
Your credit report is inoperative.
You don't have any credit, but when you check with a credit bureau, they have a credit report for you. What can you conclude?
You are not the victim of the identity theft.
The credit bureau made a clerical error.
There is nothing to worry about.
You could be the victim of identity theft.
What is the definition of freezing your credit?
No one can open a credit card in your name.
No one can use your credit cards to make a purchase.
You can only use your credit cards if you notify one of the credit reporting agencies.
The credit reporting company will call to check when someone tries to open a new account.
Why is placing a fraud alert an effective way of dealing with inaccuracies in a credit report?
No one can share your credit report with a credit card or lending company.
No one can use your credit cards to make a purchase.
You can only use your credit cards if you notify one of the credit reporting agencies.
You will be contacted when someone tries to open a new account in your name.
What's the difference between a freeze and an alert?
With a credit freeze, you can apply for new credit but you can't use your credit cards, while with a fraud alert, you can.
With a credit freeze, you can't apply for any new credit, while with a fraud alert, you can.
With a credit freeze, you can apply for new credit, while with a fraud alert, you can’t.
With a credit freeze, you can’t apply for credit, and it’s the same for a fraud alert.
If you fear you've been the victim of identity fraud, who do you contact to freeze your credit?
The Federal Communications Commission (FCC)
A private detective
The credit reporting agencies—Experian, TransUnion, and Equifax
Credit card companies where you might open an account
What is a way to tell from your credit report that you've been the victim of identity fraud?
Your address is correct.
There are accounts you don’t recognize in your credit report.
You remember opening every account on your credit report.
Your credit history starts when you opened your first credit account or loan.
Michael noticed an inaccuracy in his credit report and he is interested in applying for a new credit card next month. Which action should he take?
He should ask all three credit bureaus to freeze his credit.
He should ask one of the credit bureaus to issue a fraud alert.
He should call the police.
He should create a fraud report at the FTC.
Which of these criteria make a person a good cosigner?
They rent an apartment.
They have a steady job.
They have many debts.
They pay their bills late.
How do lenders evaluate if a borrower or cosigner will pay them back?
Cadence, collateral, calendar
Callousness, capacity, character
Capacity, criticism, character
Capacity, collateral, character
What is the correct definition of capacity for potential cosigners?
The cosigner’s credit history
The cosigner’s financial assets, such as a house or car
The cosigner’s past record of paying on time
The cosigner’s current financial situation
What is the correct definition of collateral for potential cosigners?
The cosigner’s credit history
The cosigner’s financial assets, such as a house or car
The cosigner’s past record of paying on time
The cosigner’s current financial situation
What is the correct definition of character for potential cosigners?
The cosigner’s credit history
The cosigner’s financial assets, such as a house or car
The cosigner’s past record of paying on time
The cosigner’s current financial situation
What is the correct definition of a cosigner for a loan?
Someone who will pay a loan for a borrower.
Someone who will promise to pay a loan if the borrower doesn’t.
Someone who will pay the electric bills for a borrower.
Someone who signs the loan documents.
Why would a borrower get a cosigner for a loan?
They can’t qualify for a loan by themselves.
They need help evaluating the loan terms.
The borrower can handle the entire loan themselves.
They want to open a savings account.
Chris wants to get a cosigner for a car loan. Which person would be the best choice?
A person with bad credit but a steady job.
A person with no assets (car, house, or financial account)
A person with a good credit history, a car and house
A person with some late payments on their credit card
Chris asks Sarah to cosign, but she says that she doesn't have a good credit history. Which of the following make her unable to cosign for Chris?
She has very little debt which affects her capacity.
She has made late payments which affects her character.
She owns her condo which affects her collateral.
She has a good character since she pays all credit card bills in full.
Why would a person refuse to cosign for a loan?
They are not prepared to take on another financial obligation.
They want to help the person applying for a loan.
They can make payments if the borrower doesn’t.
They trust the person who’s applying for the loan.
What is the best definition of a credit report?
A number that shows a snapshot of your credit at a specific moment in time
A number that shows how much of your overall credit you're using
A period of time between when you spend money and when the company charges you interest
A history of how you pay back loans and credit cards
What is the best definition of a credit score?
A period of time between when you spend money and when the company charges you interest
A number that shows a snapshot of your credit at a specific moment in time
A number that shows how much of your overall credit you're using
A history of how you pay back loans and credit cards
Which items do credit card and lending companies use to determine whether to lend you money or not?
Your credit bulletin
Your credit score
Your credit discount
Your credit dispatch
Which is the best way to lower credit utilization to an acceptable level?
Increase your credit card balance
Apply for more credit cards
Decrease your credit card balance
Close credit cards
Which credit utilization rate would be preferable to a lender on a credit card application?
27.5%
43.0%
76.3%
83.0%
What is a good strategy if you want to improve your credit score?
Increase your account balance
Pay your credit card bills late once in a while
Overdrawing your bank balance
Minimize new applications for credit
What habit lowers your credit score?
Pay your bills late
Decrease your credit card balance
Schedule automatic bill payment
Check your credit report
Which entries on a credit report will decrease your credit score?
Bill paid on time
Current address
Soft inquiries
Late payments
Why does higher credit utilization decrease your credit score?
Because lenders feel that you are unreliable
Because lenders are unsure of your ability to handle your account
Because lenders think you are able to take on more debt
Because lenders feel that you can't handle more debt
What kind of credit inquiry has no effect on your credit score?
A soft inquiry has no effect on your credit score.
Both hard and soft inquiries have an effect on your credit score.
A hard inquiry has no effect on your credit score.
Neither hard nor soft credit inquiries have an effect on your credit score.
