Basics Beginner: How to Rebuild Bad Credit

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When it comes to negative information in your credit report, most negative information will appear in your credit report for _______.

One year

Three years

Five years

Seven years

Seven years. Although some negative information can appear for longer, most negative information will appear in your credit report for seven years.

If you only qualify for a card with high interest rates and a high annual fee, you will almost invariably be stuck with those unfavorable terms forever.

True

False

False. If you use your high-rate, high-fee card responsibly, after several months you can apply for a card with better terms.

Which of the following is NOT a good reason to have a credit card?

To pay for daily expenses

To pay for emergency expenses that go beyond your savings

To rent a car

To build credit

To pay for daily expenses. Daily expenses are best paid for with cash.

For incorrect information that you find on your credit report, complete and submit a _______ to the credit bureau for investigation.

Disputed items form

Complaint form

Requested action form

None of the above

Disputed items form. The credit bureau will provide you with a disputed items form to fill out. When submitted, the credit bureau will investigate the items you dispute.

If you want to close one of your credit cards, which of the following will affect your credit score more?

Closing one with a balance on it

Closing one with no balance on it

Neither of the above

Closing one with a balance on it. When you close a card, your credit limit becomes zero and it may thus appear maxed out.