Basics Beginner: Credit

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1.
If the annual percentage rate on your credit card is 18%, you will pay 18% interest on each month's balance.
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False. The APR refers to the interest rate for the whole year. For this month, it would be only 1/12 of that, which would be 1.5%.
2.
The highest FICO score possible is _______.
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850. At present, this is the highest possible score. You want to get as close as possible to this score. The closer you get, the more privileges you get when it comes to taking out loans.
3.
Why might it be a good idea to apply for your first credit card at your bank or credit union?
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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.
4.
An example of revolving credit is _______.
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A credit card agreement. Credit card agreements are an example of revolving credit.
5.
Which of the following is a good reason to have a credit card?
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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.
6.
What is the most effective action you can take against a creditor?
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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.
7.
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.