Module 2- Credit 101 - Section 1 Quiz

What is credit?

• Free money from the government

• Money you borrow and don’t have to repay

• Borrowed money you promise to pay back later

• Extra income from your job

Why is credit like trust?

• You can use it to trust others with your money

• Lenders rely on your word alone

• Lenders trust you’ll repay borrowed money

• It never needs to be repaid

Which of the following is NOT a benefit of having good credit?

• Lower interest rates on loans

• Better chance of getting a job

• Lower taxes

• Easier to rent an apartment

Your credit score is like an adult money report card.

• True

• False

A credit score is:

• A measure of a person's creditworthiness

• A type of bank account

• A form of identification

• A type of loan

What is the range of most credit scores (FICO model)?

• 100–500

• 200–700

• 300 -850

• 500 - 900

What makes up the largest portion (35%) of your FICO credit score?

• Length of credit history

• Payment history

• Credit mix

• New credit

Which of these actions can hurt your credit score?

• Paying your credit card bill on time

• Opening several new credit accounts quickly

• Using less than 30% of your credit limit

• Having a long credit history

Credit can impact your everyday life in which of the following ways?

• Affecting your ability to get a loan and determining your interest rates

• Improving your physical health and increasing your height

• Changing your favorite color and food preferences

• Making you immune to common illnesses

What are the five factors that make up your FICO credit score?

• Payment history (35%), Amounts owed (30%), Length of credit history (15%), New credit (10%), Credit mix (10%)

• Income level (35%), Number of bank accounts (30%), Age (15%), Marital status (10%), Employment history (10%)

• Number of credit cards (35%), Savings balance (30%), Investment portfolio (15%), Home ownership (10%), Education level (10%)

• Monthly expenses (35%), Loan type (30%), Number of dependents (15%), Rent payments (10%), Utility bills (10%)