Unit 8 test review

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

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

Tags

CCSS.RI.8.1

CCSS.RI.8.8

CCSS.RL.11-12.1

CCSS.RL.8.1

CCSS.RL.9-10.1

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

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

Tags

CCSS.RI.4.3

CCSS.RI.5.3

CCSS.RI.6.3

CCSS.RI.7.3

CCSS.RI.8.3

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

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

Tags

CCSS.RL.11-12.6

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

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

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

What is the highest FICO credit score you can obtain?

• 100

• 650

• 850

• 1000