Personal Finance Courses: Credit

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
When it comes to negative information in your credit report, most negative information will appear in your credit report for _______.
Choose wisely. There is only one correct answer.
Seven years. Although some negative information can appear for longer, most negative information will appear in your credit report for seven years.
2.
If the annual percentage rate on your credit card is 18%, you will pay 18% interest on each month's balance.
Choose wisely. There is only one correct answer.
False. The APR refers to the interest rate for the whole year. For this month, it would be only 1/12 of that, which would be 1.5%.
3.
Debt collectors do not have to disclose the fact that they are debt collectors when they contact you about a past-due debt.
Choose wisely. There is only one correct answer.
False. By law, they must.
4.
Having a credit card that does not report your payment history to the credit bureaus helps you build a good credit history.
Choose wisely. There is only one correct answer.
False. To build a credit history, you want the card to report your payment history. Otherwise, the bureaus won't know about it.
5.
If you don't plan to be paying off your credit card balance every month, then the interest rate will be more important to you than if you did pay off your balance each month.
Choose wisely. There is only one correct answer.
True. Since you will be carrying a balance, that means you will be paying interest every month. You will want the interest rate to be as low as possible.
6.
Credit is free money.
Choose wisely. There is only one correct answer.
False. Credit is a loan of money, meaning you must pay it back with interest after using it. It is not free money.
7.
What is the minimum FICO score that is usually considered a safe risk?
Choose wisely. There is only one correct answer.
670. At 670, a person is considered a safe risk and typically receives a loan without a problem and at a low interest rate.