What Do You Know About Building Credit?
1 of 10
Based on what you’ve heard, true or false: Having debt hurts your credit.
I’m not sure.
True.
False. If you make your payments on time, you can help show that you are a responsible borrower.
2 of 10
Ideally, how much of your credit card bill should you pay each month?
More than the minimum payment amount.
The minimum payment amount.
The entire balance.
3 of 10
It’s pay day! How should you prioritize your expenses?
Pay your credit card bill and make all loan payments first.
I have all month to pay my bills; tonight I’m going out on the town.
Pay yourself first (by putting money into a retirement or emergency savings account) and then pay down your debt.
4 of 10
In addition to your credit card balances, which types of accounts affect your credit score?
Your checking and savings accounts.
None. Your credit score only refers to your credit cards.
Your mortgage and loans (e.g. personal, car, and student).
5 of 10
If you were having a hard time making your student loan payments, what course of action would you most likely take?
I’d ask for lower payments, but probably put it off because I’d be worried it’ll affect my credit score.
I’d likely skip the payments for a few months—what’s the worst that could happen?
I’d probably apply for deferment or forbearance until I’m back on my feet.
6 of 10
Which of the following has the greatest impact on your credit score?
Amounts owed
Credit limit
Payment history
7 of 10
A recent college graduate has just opened her very first credit card. Despite paying off her entire balance each month, her credit score is just okay. Why might this be?
She probably has a low credit limit.
Because using credit cards regularly will keep your credit score low.
The length of her credit history, which accounts for 15% of her FICO credit score, is still short.
8 of 10
You’ve been striving to completely pay off one of your credit card balances for months and have finally done so. What should you do now?
Keep the card open but be careful never to use it.
Close the card—you wouldn’t want to risk going back into debt!
Keep the card open and regularly use it for small expenses you know you can immediately pay off.
9 of 10
Doing which of the following could have the biggest positive effect on your credit?
Paying off your mortgage and/or student loans.
Using a debit card instead of a credit card to eliminate credit card debt.
Tackling your credit card debt then committing to paying the entire balance each month.
10 of 10
Someone who’s had a tough time building credit, but is now committed to increasing their score, should:
Make consistent on-time payments on all your accounts (loans and credit cards) of at least the minimum amount.
Cancel all your credit cards immediately.
Take a good, hard look at your credit report—perhaps with the help of a financial professional—and diagnose your weaknesses.
