#1
1. What is a credit score used for?
Determining eligibility for government benefits
Assessing risk for lending money
Setting interest rates for credit cards
Calculating income tax
#2
6. What is the purpose of a credit report?
To track monthly expenses
To monitor investment portfolios
To assess an individual's creditworthiness
To calculate income tax
#3
11. What does the term 'cosigner' mean in the context of credit?
Someone who collects debts on behalf of the lender
A person who shares equal responsibility for a loan
An individual with an exceptional credit score
A financial advisor
#4
16. What is the Debt-to-Income Ratio used for in the context of credit assessment?
To measure the amount of debt compared to available credit
To assess how well an individual manages debt payments
To evaluate the proportion of income used to repay debts
To calculate the interest on a loan
#5
21. How does a debt settlement impact your credit score?
Positively affects the score
Has no impact on the score
May negatively impact the score
Improves the credit utilization rate
#6
2. Which of the following factors does NOT typically impact your credit score?
Payment history
Length of credit history
Annual income
Types of credit in use
#7
3. How long does negative information, such as late payments or bankruptcies, stay on your credit report?
2 years
5 years
7 years
10 years
#8
7. How often are individuals entitled to receive a free copy of their credit report from each of the major credit bureaus?
Once a year
Twice a year
Every three years
Only upon request
#9
8. Which of the following is a soft inquiry on your credit report?
Applying for a credit card
Checking your own credit score
Late payment on a loan
Defaulting on a mortgage
#10
12. How does the age of credit accounts affect your credit score?
It has no impact on the credit score
Newer accounts are favored over older ones
Longer credit history may positively influence the score
Older accounts are considered riskier
#11
4. What is the highest possible credit score according to the FICO scoring system?
#12
5. In the context of credit scores, what does 'utilization rate' refer to?
The percentage of available credit being used
The duration of credit history
The number of credit inquiries
The ratio of good to bad credit
#13
9. What action may positively impact your credit score over time?
Closing old credit accounts
Making timely payments
Having a high credit utilization rate
Applying for multiple credit cards simultaneously
#14
10. What is the purpose of a credit score range, such as 'Excellent,' 'Good,' 'Fair,' and 'Poor'?
To categorize individuals based on their favorite colors
To indicate the types of credit available
To provide a general assessment of creditworthiness
To determine eligibility for student loans
#15
14. What is the impact of closing a credit card account on your credit score?
It has no impact
Can positively impact the score
May negatively affect the score
Only affects the utilization rate