Question

1. Which best describes interest?
	a. Interest is another word for the cash and rewards you get from using certain credit cards.
	b. Interest is a method by which you can compare the cost of comparable purchases.
	c. Interest is the cost associated with using credit and it ultimately makes any purchase made using credit more expensive than the same purchase made with cash.
	d. Interest is the fee associated with using more credit than the limit on your credit card.

2. A wise use of credit is to
	a. help make major purchases that would be very difficult to acquire otherwise, such as a college education, automobile or home.
	b. purchase things that you want very badly, but don't have the cash to pay for right this moment.
	c. purchase gifts for family and friends when you want to treat them to something special.
	d. avoid it at all costs and pay only cash for every purchase.

3. By going to www.annualcreditreport.com I'm able to
	a. obtain a free copy of my credit report from the three major credit bureaus each year.
	b. apply for student loans, auto loans, mortgages, and some credit cards using one standard application
	c. add information to my credit report that I think might be helpful for lenders to know.
	d. check the status of my tax refund.

4. What is a credit score?
	a. A credit score is a special type of loan made to recent college graduates.
	b. A credit score is a number that represents the likelihood that you will pay your bills on time.
	c. A credit score is a score that takes into account your age and income to determine if you're eligible for a loan.
	d. A credit scoring is a method used to compare the costs of various loans.

Answer 1

1. C

Interest is the cost associated with using credit and it ultimately makes any purchase made using credit more expensive than the same purchase made with cash. It is money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt

2. B

WISE USE OF CREDIT purchase things that you want very badly, but don't have the cash to pay for right this moment. this is because you have to pay interest on the amount used as credit. thus it must be used wisely.

3. ans A

obtain a free copy of my credit report from the three major credit bureaus each year. The government-mandated AnnualCreditReport.com website is the quickest way to request your credit reports for free every 12 months from each of the three major bureaus: Equifax, Experian and TransUnion.

4. ans C

A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual. ... Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits.

a breakdown of the five elements of the FICO score:

• Payment history. Your payment history comprises 35 percent of the total credit score and the most important factor in calculating credit scores. ...
• Credit utilization. ...
• Length of credit history. ...
• New credit. ...
• Credit mix.