Quiz: Level Up Your Credit Score!
Whether you’re applying for a home loan or shopping for a cell phone plan, your credit score can be anything from a slam dunk (getting you the best possible terms) to an airball (denial of credit or high interest rates). If you want to get in the zone, study the plays and then test your mastery of the game with this quiz.
1. Your credit score impacts the terms you get for:
- Home and auto loans
- Home loans, auto loans, and credit cards
- All of the above, including insurance premiums, utility deposits, cell phone plans, and more
2. You have a credit card with a $5,000 limit. Generally, what is the recommended utilization limit to avoid a negative impact to your credit score?
- $1,500 (30% of your limit)
- $3,500 (70% of your limit)
- $2,500 (50% of your limit)
3. Which factor could impact your FICO score the MOST?
- On-time payment history
- Amount of debt you owe
- Newly opened accounts and mix of credit types
4. You’re planning to buy a house next year, but your credit score isn’t great. Do you:
- Talk to a credit counselor and make a step-by-step plan to improve your score?
- Hope that you can find a lender who will work with you?
- Keep all your accounts current and try not to run up more debt?
5. What’s the minimum credit score most lenders typically require for approval on a conventional mortgage loan?
- 300
- 620
- 700
6. What should you do if you finish paying off a credit card?
- Keep it open and pay off any new charges in full each month
- Close the account
- Keep the card open, avoid making any new changes, and direct the amount you were paying towards the card to pay down other debts
7. You get an income tax refund and decide to use it to improve your credit score. Which approach do you take?
- Pay down a small amount of credit card debt but use the rest of the money for something fun.
- Pay down your highest balances but save some money for an emergency fund for unexpected expenses
- Put the entire refund toward paying off credit cards and other debt
8. Which of these should you NOT do when trying to improve your credit score?
- Have a new hard inquiry on your account
- Order copies of your credit report to review for errors
- Run up a lot of new debt, make late payments, cancel old credit accounts
Answers:
- 3
- 1
- 1
- 1
- 2
- 3
- 2
- 3
How'd you do? If you feel like you have some room for improvement on understanding credit scores, check out this article to read up on everything from how the score is calculated to keeping it up. If you did well, congrats! You may be closer to buying a home than you realize.
3/22/23