Credit Review slides 1-18

What is a credit score or FICO® score?

• A prediction of how likely you are to pay your bills

• A number between 0 and 100 derived from many different factors

• A number that shows the approval of credit

• Determines the interest rate you pay on those extensions

Mason is considering getting a credit card. What are the advantages of credit?

• Paying interest

• Useful for emergencies

• Additional fees are necessary

• Ability to purchase expensive items

Fill in the blank: According to Citibank, 'There are presently 5 to 7 million Americans who are financially __________.'

• overextended

• secure

• independent

• stable

Zoe is considering getting a credit card. What are the disadvantages she should be aware of?

• Paying interest

• Additional fees are necessary

• Temptation to overspend

• Can cause large amounts of debt

Explain the concept of using credit wisely.

• Using credit for unnecessary expenses

• Paying off credit card balances in full each month

• Maximizing credit card limits

• Ignoring credit card statements

What are the key factors in the FICO scoring model?

• Payment history, amounts owed, length of credit history, new credit, and credit mix

• Income level, employment status, age, and education level

• Geographic location, marital status, number of dependents, and housing status

• Social media activity, online shopping habits, and internet browsing history

What is the purpose of a billing statement?

• To provide a summary of financial transactions

• To offer investment advice

• To serve as a legal document for property ownership

• To calculate tax returns

What should you read before applying for a credit card?

• Terms and conditions

• User reviews

• Credit card advertisements

• Bank brochures

Which of the following is included in a Schumer box?

• A) Interest rates

• B) Billing cycle

• C) Credit score

• D) Payment history

is a three-digit number that rates your creditworthiness. The higher the score the more likely you are to

get approved for loans and for better rates.

• Federal Reserve

• CCC

• Credit Score

• Credit Card