Basics Beginner: Credit

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1.
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.
2.
Having credit available is necessary for most of us who want to _______.
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All of the above. For most of us, we need credit to do these things.
3.
Which of the following is the largest part of your FICO score?
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Payment history. Your payment history carries more weight than any other measure.
4.
If you don't plan to be paying off your credit card balance every month, then the interest rate will be more important to you than if you did pay off your balance each month.
Choose wisely. There is only one correct answer.
True. Since you will be carrying a balance, that means you will be paying interest every month. You will want the interest rate to be as low as possible.
5.
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.
6.
What is the main reason behind using a credit card to buy things that you already have cash for?
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It helps build a good credit record. Having the money already on hand makes it easy to pay your bill, and in the future, you will benefit from the enhanced credit history.
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.