Understanding Credit Scores

What is a credit score?

• A number used by lenders to represent the risk you are to them

• A measure of your income

• A type of loan

• A bank account balance.

Match the following factors with their descriptions: Payment History, Total Amount Owed, Length of Credit History, Types of Credit, New Credit.

• Payment History

• When did you open your first bank account

• New Credit

• How often do you use borrowed money to pay for something.

• Types of Credit

• Do you make your payments on time

• Length of Credit History

• Loans, Credit Cards, High risk loans, medical bills

• Total Amount Owed

• Somewhat relative to how much you make

A high credit score can almost guarantee you two things: a lower interest rate and (a)   . A) A chance to win a lottery B) A real good chance you will get a loan C) A free credit card D) A new bank account.

• A chance to win a lottery

• A real good chance you will get a loan

• A free credit card

• A new bank account

What score should you strive for to be considered excellent.​ (a)   and what is considered good to very good​ ​ (b)   and if it is below​ (c)   you have some work to do!

• 800 or above
• less than 600
• between 900 and 100
• A score of 670 to 790
• Between 150 and 350
• 1000 or better
• 600

What is an annual fee in the context of credit cards?

• A fee for using an ATM

• A fee you must pay to have the card, even if you don’t use it

• A fee for late payment

• A fee for balance transfer.

Match the following types of fees with their descriptions:

• Penalty Fee

• Fee charged for taking a cash out of your credit card as opposed to from your bank

• Cash Advance Fee

• Payiing your bill by phone, and balance transfers

• Transfer Fee

• Fee for violating terms of credit agreement

A (a)   is a fee for violating the terms of a credit agreement.

• Transaction Fee

• Penalty Fee

• Annual Fee

• Cash Advance Fee

Using an ATM not associated with your card may incur a (a)   .

• Transaction Fee

• Annual Fee

• Cash Advance Fee

• Penalty Fee

What is meant by 'Shared Responsibility'?

• When one person bears all obligations

• When two or more people each agree to bear a portion of an obligation

• When responsibilities are ignored

• When only financial obligations are shared.

Living habits must be (a)   with those of your roommate to avoid disaster.

• compatible

• different

• ignored

• opposite