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Think You Know About Credit? Can You Pass This Quiz?

Credit is one of the most important things in our financial lives but not everyone fully understands it. Test your credit knowledge with these 15 questions.

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  1. What is the highest FICO credit score you can have?

    mastermyfinance.com
    Correct
    Incorrect
    1,000
    Correct
    Incorrect
    1,225
    Correct
    Incorrect
    850
    Correct
    Incorrect
    560
    Correct!
    Wrong!

    A seemingly random but important number

    850 is the highest score possible but anything above 720 can be considered "excellent."

  2. Just for fun, what's the lowest FICO credit score possible?

    Correct
    Incorrect
    Zero
    Correct
    Incorrect
    300
    Correct
    Incorrect
    -100
    Correct
    Incorrect
    450
    Correct!
    Wrong!

    While you can't hit 0, 300 is still really really bad.

  3. True or False? — Everyone only has one credit score.

    moneysedge.com
    Correct
    Incorrect
    True
    Correct
    Incorrect
    False
    Correct!
    Wrong!

    You could have over a dozen!

    In addition to the three major credit bureaus each providing their own score, there are several ways for creditors to calculate scores (FICO is one method). This means you could have a dozen or more credit scores.

  4. By the end of the year, U.S. consumers will have a combined credit card debt of:

    quickenloans.com
    Correct
    Incorrect
    $1 trillion
    Correct
    Incorrect
    $875 billion
    Correct
    Incorrect
    $990 million
    Correct
    Incorrect
    $10 trillion
    Correct!
    Wrong!

    With a 't'

    It's not quite there yet (it reached over $950 billion in May) but credit card debt in the U.S. is on track to hit $1 trillion this year.

  5. Which of the following is an example of revolving credit?

    Correct
    Incorrect
    Student loan
    Correct
    Incorrect
    Store credit card
    Correct
    Incorrect
    Car payment
    Correct
    Incorrect
    Mortgage
    Correct!
    Wrong!

    Credit cards = revolving credit

    Lines of credit are treated differently than loans where you pay in installments. Having both assists your "credit mix" which is accounted for in your FICO credit score.

  6. True or False? — When credit cards advertise “no annual fee,” that’s the same as “0% interest.”

    lowestrates.ca
    Correct
    Incorrect
    True
    Correct
    Incorrect
    False
    Correct!
    Wrong!

    Not even close

    While one card may offer an introductory 0% interest rate and no annual fee at the same time, they are not the same thing at all. "Annual fees" refer to the fact that some high-end cards charge you hundreds of dollars just for the privilege of having one. Be sure to check the actual interest rate (including what the rate will be after the 0% offer ends) before signing up for any credit card.

  7. True or False? — Your credit card’s APR can go up if you make a late payment.

    pinterest.com
    Correct
    Incorrect
    True
    Correct
    Incorrect
    False
    Correct!
    Wrong!

    Double ouch

    Not only can your credit get dinged for making a late payment but, if you're more than 60 days late, your card issuer may also raise your APR. Moral of the story: pay on time.

  8. What single factor makes up the largest chunk of your FICO credit score?

    Correct
    Incorrect
    Payment history
    Correct
    Incorrect
    Amounts owed
    Correct
    Incorrect
    Credit mix
    Correct
    Incorrect
    Length of credit
    Correct!
    Wrong!

    Payment history makes up 35%

    Of the five factors that go into your FICO credit score, your payment history has the most weight.

    Payment history makes up 35%
    Via www3.dupaco.com
  9. If you make a late payment, how long will that show on your credit report?

    creditfirm.net
    Correct
    Incorrect
    6 months
    Correct
    Incorrect
    1 year
    Correct
    Incorrect
    3 years
    Correct
    Incorrect
    7 years
    Correct!
    Wrong!

    Just like swallowed gum, it'll stick with you for a while

    Even if you only pay late once it could show on your report for the next seven years. The good news is that its impact on your score should decrease over time. Still, it's just one more reason to pay on time.

    Just like swallowed gum, it'll stick with you for a while
    Via dyernews.com
  10. True or False? — Paying off your credit card every month won’t earn you any credit. Holding a balance will help increase your score as long as you pay on time.

    wikihow.com
    Correct
    Incorrect
    True
    Correct
    Incorrect
    False
    Correct!
    Wrong!

    A bad myth

    Contrary to popular belief, paying off your credit card balance monthly is a good thing. There is NO need to carry over a balance and it will not boost your credit score to do so.

  11. True or False? — There are two different types of credit inquires: one that could ding your score and one that won’t.

    Correct
    Incorrect
    True
    Correct
    Incorrect
    False
    Correct!
    Wrong!

    Known as "hard" and "soft" inquiries

    A hard inquiry may actually affect your credit slightly. However soft inquiries will not affect your score at all. Typically applying for a loan or credit card will require a hard inquiry while background checks will only do soft inquiries.

  12. Which of the following is least likely to be revealed on your credit report?

    blog.mint.com
    Correct
    Incorrect
    How many credit accounts you have
    Correct
    Incorrect
    Where you've lived
    Correct
    Incorrect
    How long you've had your accounts
    Correct
    Incorrect
    How much you make
    Correct!
    Wrong!

    They don't know everything

    Although you'll be asked how much you make when applying for a credit card, this information does not appear on your report. However, this doesn't mean you should lie about how much you make on applications as there are ways for creditors to verify the information and fraud is illegal.

  13. Which of these is NOT the name of one of the three major credit bureaus:

    northshoreadvisory.com
    Correct
    Incorrect
    Experian
    Correct
    Incorrect
    TransUnion
    Correct
    Incorrect
    Passtech
    Correct
    Incorrect
    Equifax
    Correct!
    Wrong!

    The Big Three

    As mentioned, all of these bureaus hold reports on your credit. Some creditors may report to just one while others might report to all three.

    The Big Three
    Via cdn.gobankingrates.com
  14. True or False? — APR is just another term for “interest rate.”

    openwonga.com
    Correct
    Incorrect
    True
    Correct
    Incorrect
    False
    Correct!
    Wrong!

    A common source of confusion

    APR stands for annual percentage rate and is not synonymous with interest rate. While APR includes the interest rate, it also factors in other fees and costs.

  15. Finance experts recommend that you use less than what percentage of your revolving credit?

    dyernews.com
    Correct
    Incorrect
    30%
    Correct
    Incorrect
    50%
    Correct
    Incorrect
    10%
    Correct
    Incorrect
    It doesn't matter
    Correct!
    Wrong!

    The lower the better

    If your card has a limit of $1,000, it's best to not put more than $300 on it at one time to keep your usage under 30%. Additionally this is PER CARD.

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