Understanding Credit Scores

What is a credit score primarily used for?

• To determine your annual income

• To assess your creditworthiness to lenders

• To calculate your monthly expenses

• To evaluate your savings potential

Which factor is most significant in determining your credit score?

• Your employment status

• The amount of cash in your bank account

• Your payment history

• The number of credit cards you own

How can keeping your credit utilization low affect your credit score?

• It can decrease your credit score

• It has no effect on your credit score

• It can increase your credit score

• It can lead to higher interest rates

What is a potential consequence of applying for multiple loans in a short period?

• It can improve your credit score

• It can lower your monthly payments

• It can make you appear risky to lenders

• It can increase your savings

What happens if a debt goes to collections?

• It will be removed from your credit report

• It can improve your credit score

• It has no impact on your credit score

• It will have a severe negative impact on your credit score