Personal Finance Courses: Credit

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1.
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.
2.
If you have bad credit and receive a credit card offer tailored to those with bad credit, what can you expect the interest rate to be like?
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Very high. Because you are deemed a risk, your interest rate would be quite high.
3.
How long can a bankruptcy stay on your credit report?
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Seven or 10 years, depending on the type of bankruptcy. At present, they can stay this long.
4.
What collection efforts can a creditor that obtains a court judgment against you legally do?
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The creditor can take steps to garnish your wages and seize assets, such as bank accounts. The creditor can also file a lien against any real estate you own.
5.
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.
6.
Opening several new credit accounts in a short period of time can result in an improved credit score.
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False. Opening several new credit accounts in a short period of time can result in a lowered credit score.
7.
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.