Personal Finance Courses: Credit

Test your knowledge

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

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Review your answers below to learn more.
1.
Having credit available is necessary for most of us who want to _______.
Choose wisely. There is only one correct answer.
All of the above. For most of us, we need credit to do these things.
2.
Which of the following is probably the wisest use of credit?
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Pay off higher-interest loans before lower-interest loans.
3.
During what hours does the law allow debt collection agencies to call you?
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Collection agencies may call only at reasonable times. The law says that calls before 8 a.m. or after 9 p.m. are unreasonable.
4.
When you pay back a loan, what are you typically paying?
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Principal plus interest. Generally, you pay back the principal plus interest over the life of the loan. In certain cases, though, you might pay just the interest for a while.
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.
Paying the minimum monthly payment on your credit is affordable, but a major downside is that it takes much longer to pay off.
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True. The less you pay each month, the longer it takes to pay off. Plus, you pay a huge amount of interest.
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.