Increasing your credit score

What is the difference between a credit rating and a credit score?

• A credit rating is an assessment of creditworthiness, while a credit score is a number that determines creditworthiness.

• A credit rating is a number that determines creditworthiness, while a credit score is an assessment of creditworthiness.

• A credit rating is based on calculations in areas such as payment history and amount owed, while a credit score is a grade for past financial behavior.

• A credit rating is a grade for past financial behavior, while a credit score is based on calculations in areas such as payment history and amount owed.

What is the range of a FICO score?

• 100 to 500

• 300 to 850

• 500 to 1000

• 700 to 1000

What is considered a good credit score?

• 300 or lower

• 500 or lower

• 600 or lower

• 700 or higher

How can individuals establish initial credit?

• By having someone with an established credit history cosign their credit card application.

• By applying for a car loan with a low interest rate.

• By paying off all outstanding balances in one month.

• By avoiding any form of credit.

What is one way to avoid credit risk?

• Paying outstanding balances before interest and other charges accumulate.

• Seeking out more credit than is needed.

• Borrowing from multiple sources of consumer credit.

• Making minimum payments on outstanding balances.

Why is it important to have a good credit rating?

• To receive better insurance rates.

• To find a better job.

• To make home improvements.

• All of the above.

What are the Five Cs of Credit?

• Character, Capacity, Capital, Conditions, and Collateral.

• Credit, Cash, Capital, Conditions, and Collateral.

• Character, Credit, Capital, Conditions, and Collateral.

• Character, Capacity, Credit, Conditions, and Collateral.

Who would NOT want to know about your credit history?

• Banks

• Employers

• Landlords

• College Professor

What is one factor that lenders consider when determining creditworthiness?

• Length of credit history

• Types of credit

• Payment history

• All of the above.

How often can individuals get a free credit report?

• Once every 5 years

• Once every 2 years

• Once every 3 years

• Once every year