Basics Beginner: Credit

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

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Review your answers below to learn more.
1.
When it comes to negative information in your credit report, most negative information will appear in your credit report for _______.
Choose wisely. There is only one correct answer.
Seven years. Although some negative information can appear for longer, most negative information will appear in your credit report for seven years.
2.
What is the most effective action you can take against a creditor?
Choose wisely. There is only one correct answer.
Deal with them as soon as possible. The sooner you deal with them, the better the chance of sparing your credit and reducing the costs of a fight.
3.
Paying the minimum monthly payment on your credit is affordable, but a major downside is that it takes much longer to pay off.
Choose wisely. There is only one correct answer.
True. The less you pay each month, the longer it takes to pay off. Plus, you pay a huge amount of interest.
4.
Why might it be a good idea to apply for your first credit card at your bank or credit union?
Choose wisely. There is only one correct answer.
It already has a sense of your financial health. It already has a sense of your financial health. Because of this, it may be willing to offer you a credit card.
5.
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.
6.
Opening several new credit accounts in a short period of time can result in an improved credit score.
Choose wisely. There is only one correct answer.
False. Opening several new credit accounts in a short period of time can result in a lowered credit score.
7.
Which of the following is a good reason to have a credit card?
Choose wisely. There is only one correct answer.
A credit card can be valuable in case an emergency exceeds your available funds on hand. A credit card can be a lifesaver if you have to pay for emergency expenses that go beyond your savings.