Basics Beginner: How to Rebuild Bad 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.

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.

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.

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.

How long can a bankruptcy stay on your credit report?

Seven years

10 years

Seven or 10 years, depending on the type of bankruptcy

Indefinitely

Seven or 10 years, depending on the type of bankruptcy. At present, they can stay this long.

Which of the following is a good credit-building step?

To submit multiple credit card applications on the same day

To 'max out' any credit cards you already have

To avoid adding money to any bank deposit accounts

To apply for a small retail store or gasoline company credit card

To apply for a small retail store or gasoline company credit card. These are often the easiest cards to get. If you get a card, charge items and pay the bill on time.