Financial Literacy Quiz

Building Credit

The Importance Of Credit

Why do we need credit at all?

While it’s possible to go through life without ever using credit or having a credit report, the reality is that having good credit can help you do things that otherwise wouldn’t be possible.

The Importance Of Credit

question 1 of 15 How do lenders use your credit information?

A. A lender checks your credit score and credit report to see if you meet their requirements to be approved for a loan

B. To help determine your interest rate

C. To make sure you don’t have a lot of credit accounts

D. A & B

The Importance Of Credit

question 2 of 15 Which form of money do experts say is often the safest?

A. Cash

B. Credit card

C. Debit card

D. Personal checks

The Importance Of Credit

question 3 of 15 Can you rent an apartment without credit?

A. Yes, credit scores are never considered when you apply to rent

B. Yes, but you’ll need to pay the entire year’s rent up front

C. Possibly, but you may need to provide references, get a co-signer or pay a larger security deposit

D. No, you need a credit score to rent an apartment

The Importance Of Credit

question 4 of 15 True or false: Your credit history can affect your car insurance rate.

True

False

The Importance Of Credit

question 5 of 15 What are the benefits of having a good credit score?

A. Lower interest rates and better terms on loans

B. Easier time renting an apartment or setting up utility services

C. Better access to credit when you need it

D. All of the above

Building A Credit History

Building credit now is key to setting yourself up for financial wellness in the future.

When you have a credit history, lenders and other financial institutions are able to look at how you’ve handled credit accounts in the past. This helps them decide whether or not to lend you money, and if they do, how much and at what interest rate.

Building A Credit History

question 6 of 15 How can a person start building credit if they currently have no credit history?

A. A credit builder loan

B. A secured credit card or a student credit card

C. Become an authorized user on someone else’s credit card

D. All of the above

Building A Credit History

question 7 of 15 What factors make up your credit score?

A. Income, payment history and number of accounts open

B. Payment history, spouse’s credit score, your income and the amount of money you have saved up

C. Payment history, credit usage, length of credit history, types of credit accounts you have and how many new accounts or inquiries you have

D. The amount you use your credit cards and whether you have too many credit cards

Building A Credit History

question 8 of 15 True or false: A credit score and a credit report are the same thing.

True

False

Building A Credit History

question 9 of 15 What does APR stand for?

A. Annual percentage rate

B. Annual prepayment rate

C. Agreed premium rating

D. All pizza rules

Building A Credit History

question 10 of 15 True or false: If you pay your credit card bill in full every month and don’t carry a balance, you won’t have to pay interest.

True

False

Establishing Good Credit

Once you’ve established a credit history, you’ll want to start working to build a good credit score. Having a good score can make getting approved for loans easier, get you access to better rates and terms and save you money.

Establishing Good Credit

question 11 of 15 What credit score range do the most commonly used credit scoring models use?

A. 1 – 10

B. 300 – 850

C. 350 – 800

D. 100 – 1,000

Establishing Good Credit

question 12 of 15What is an ideal credit utilization rate?

A. 0%

B. Below 10%, but not 0%

C. Below 30%

D. 50%

Establishing Good Credit

question 13 of 15 True or false: Keeping a balance on a credit card is better for your credit score than paying in full.

True

False

Establishing Good Credit

question 14 of 15 How many credit accounts should you have?

A. Zero

B. One or two

C. Between five and eight

D. It depends

Establishing Good Credit

question 15 of 15 True or false: Closing a credit card can hurt your credit score.

True

False

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Building Credit

Let’s give some credit where credit is due; credit is an integral part of our modern world, for better or worse. Not having it or having poor credit can make certain things – such as taking out a loan, renting an apartment or getting a cell phone – more difficult.

To those who are just starting out on their financial journeys, credit can seem like a daunting concept. And it’s true, credit can be scary when you aren’t sure how to utilize it correctly. But used wisely, credit can be a powerful financial tool.

In this quiz, we’ll go over the basics of credit in three sections:

The Importance of Credit

Building a Credit History

Establishing Good Credit

Start Quiz Now