Credit Quiz

Are you credit wisely?

Credit Quiz

Please jot down your answers in a piece of paper, we will give the answer at the end with explanations.  

Question 1
What is a credit card?
(A) A loan that has to be paid off every month.
(B) An arrangement by which you can buy something now, with the promise that you will pay for it in the future.
(C) A money substitute for items you cannot afford.
(D) All of the above.

Question 2
What are the advantages of having a credit card?

(A) It takes all the worry out of buying things, because you know the money will be there when you need it.
(B) You don’t have to carry cash or wonder whether someone will accept your check.
(C) It doesn’t cost anything to use it.
(D) All of the above.

Question 3
Why is it important to have good credit?
(A) To be eligible for a job.
(B) To buy a car and get auto insurance.
(C) To rent an apartment or buy a house.
(D) All of the above.

Question 4
What do lenders look for before they lend you money?

(A) What kind of grades you earn.
(B) Whether or not you pay your bills on time (your credit history).
(C) Your intended date of graduation.
(D) All of the above.

Question 5
How can you build a good credit history?

(A) Only use your credit card when you know you can afford to use it.
(B) Establish other forms of credit—like a checking account, debit card and car payments—that can help demonstrate that you are responsible.
(C) Be reliable, stay within your affordable budget.
(D) All of the above.

Question 6
How can you maintain good credit?

(A) Pay at least the minimum payments of all your bills on time.
(B) Ask your parents to pay your bills for you.
(C) Use all your available credit on all accounts.
(D) All of the above.

Question 7
What is a credit report?

(A) A record of every purchase you’ve ever made with your credit card.
(B) A report indicating how many times you’ve applied for credit and been accepted or turned down.
(C) A record of how well you pay back your creditors and whether you pay your bills on time.
(D) All of the above.

Question 8
What is an acceptable percentage of your income to spend on credit card bills?
(A) 0%—20%.
(B) 21%—40%.
(C) 41%—60%.
(D) 61%—80%.

Question 9
Which of the following may request your credit report from a credit bureau?

(A) Insurance companies.
(B) Your employer.
(C) Your landlord.
(D) All of the above.

Question 10
What should you do if you’re having trouble paying your credit card bills?

(A) Borrow money from friends or your parents.
(B) Use another credit card to pay them off.
(C) Speak with a family member, friend, or other advisor, and work with your creditors to determine how you can best repay your obligations.
(D) All of the above.

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