Personal Finance Courses: Credit

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

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1.
How long can a bankruptcy stay on your credit report?
Choose wisely. There is only one correct answer.
Seven or 10 years, depending on the type of bankruptcy. At present, they can stay this long.
2.
Which of the following alternatives to a credit card would save you the most money in interest and fees?
Choose wisely. There is only one correct answer.
Creating a savings plan to pay for an item without using credit. This option would save you the most money. Its only downside is that it might take you several months to save up the money.
3.
It is possible to use a credit card to earn more than you pay on it.
Choose wisely. There is only one correct answer.
True. You can earn rewards while paying your balance in full each month and avoiding fees.
4.
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.
5.
The higher your credit score is, the _______ the interest rates will be on loans you take out.
Choose wisely. There is only one correct answer.
Lower. If you have a high credit score, that tells lenders that you are a responsible borrower, and they will charge you a lower interest rate than if your credit score were low.
6.
Which of the following actions are outside collection agencies legally allowed to take against you?
Choose wisely. There is only one correct answer.
None of the above. All these actions are illegal.
7.
What is the limit on the amount of credit you can get?
Choose wisely. There is only one correct answer.
It depends on what the credit agreement states. The credit agreement that you sign when applying for credit will state how much you can get. Often, this amount will rise over time if you are responsible with it.