8.0 Managing Credit & Fundamentals of Statistics Assessment

1. All of these are true about late credit card payments, EXCEPT...

• They can drop your credit score by as much as 100 points
• They are an extremely rare occurrence among American credit cardholders
• They can stay on your credit report for up to 7 years
• They are the largest factor in your overall credit score

2. Meghan asks 4 friends for advice on how to raise her credit score, which is currently at 650. Which is the strongest piece of advice?

• Close as many credit card accounts as you can
• Open up a savings account
• Pay your credit card bill on time each month
• Pay off your debts as slowly as possible

3. Which of the following actions would be included in your credit report?

• You bought a $300 prepaid card
• You checked your credit score on your bank’s mobile app
• You made your student loan payment on time
• You used your debit card at the grocery store

4. Struggling to pay off excess debt can lead to all of these consequences, EXCEPT...

• Developing health problems from the stress of carrying debt
• Having your wages reduced by collectors on unpaid debts
• Being fired from your job if your employer finds out you have too much debt
• Having purchases repossessed (home, vehicle, etc.) for failure to make payments

5. Which student is most likely to have the highest credit score?

• Hassan has 3 credit cards with low balances and often forgets which one they need to make payments on and is late
• Bekkah has 2 credit cards and they’re usually near their credit limit
• Kareem has 3 credit cards that they pay in full every month and recently applied for a new line of credit
• Sarah has never had a credit card and has over $10,000 in her savings account

6. All of the following statements about predatory lending are TRUE EXCEPT…

• They have a federally-mandated maximum APR of 25%
• They disproportionately affect communities of color
• They can come in many forms like high interest rates and excessive fees
• They often occur in conjunction with home mortgages

7. Why is it important to check your credit report regularly?

• To improve your credit score through frequent hard inquiries
• To identify potential errors or fraudulent activity
• To monitor the transactions on your credit card
• To automatically increase the credit limit on your revolving credit accounts

8. How is a secured credit card different from the far more typical unsecured credit card?

• A secured credit card is the same as a debit card, drawing money down directly from your checking account
• A secured credit card has interest rates far lower than those of a typical credit card
• A secured credit card requires the borrower put down a deposit to create their credit limit
• A secured credit card cannot be used to shop online, because you have to sign a receipt after every purchase

9. Theo reviews his credit report and decides to put a “red flag” on it. What does that mean?

• New lenders will double-check Theo’s identity before approving a credit application
• Theo will not be able to open new lines of credit for at least 1 year
• The credit bureau has 30 days to resolve any errors in Theo’s credit report
• Late payments will be removed from Theo’s credit report for a fee

10. What is the highest FICO credit score you can obtain?

• 100
• 650
• 850
• 1000