Managing Credit

Which of the following is a benefit of maintaining a good credit score?

• Higher interest rates on loans

• More frequent credit checks

• Better chances of loan approval

• Increased monthly expenses

What is a potential consequence of having a low credit score?

• Lower interest rates on loans

• Difficulty in getting approved for new credit

• Increased credit card limits

• More favorable loan terms

What is a common reason for a sudden drop in your credit score?

• Missing a credit card payment

• Receiving a salary increase

• Opening a new savings account

• Paying off a loan early

What is the primary purpose of a credit report?

• To provide a history of your credit activity

• To determine your annual income

• To track your spending habits

• To list your personal assets

When applying for a loan, why might a lender be interested in your credit score?

• To determine if you actually need a loan

• To set the loan's interest rate and terms based on risk

• To know how much money you have in your bank account

• To sell your personal information to third parties

All of the following are part of a credit report EXCEPT:

• Spending Habits

• Loan Repayment

• Credit Limit Utilization

• Current Credit Inquiries

How long does a bankruptcy typically remain on a credit report?

• 3-5 years

• 7-10 years

• 12-15 years

• Indefinitely

What is the effect of making only the minimum payment on your credit card each month?

• It helps improve your credit score significantly

• It can lead to higher interest charges over time

• It prevents any interest from accruing

• It results in immediate debt reduction

Failing to pay federal student loans may result in:

• Reduced student loan interest

• Higher credit score

• Tax refund garnishments

• Revocation of your degree

Which of the following does NOT contribute to your credit score?

• Your payment history

• Which banks issued your credit cards

• Your debt-to-credit ratio

• Length of credit history