11. Credit Card Management and Credit Health

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What is a potential benefit of having a good credit score?

Qualifying for better interest rates on loans and credit cards (correct)

Paying higher interest rates on loans

Increasing credit card limits

Avoiding credit card fees

What happens when you 'max out' a credit card?

You use the credit card to its credit limit (correct)

You hide the card from lenders

You pay off the credit card completely

You destroy the card physically

What practice is beneficial for your credit health?

Keeping a high balance on one card

Using different types of credit (correct)

Missing a credit card payment

Only using cash for all transactions

How can identity theft affect your credit score?

Negatively, by potentially opening fraudulent accounts in your name Signup and view all the answers

What should you do if you find an error on your credit report?

Report it to the credit bureau Signup and view all the answers

What is the main purpose of the Fair Credit Reporting Act (FCRA)?

To ensure the accuracy of credit reports Signup and view all the answers

What is the primary purpose of a credit score?

To analyze a person's credit files and provide a numerical expression Signup and view all the answers

What is a potential consequence of having a high credit score?

Lower interest rates on loans and credit cards Signup and view all the answers

What is a good practice for managing credit card debt?

Keeping your credit card balances low Signup and view all the answers

What does a credit report typically include?

A record of loan repayment history Signup and view all the answers

What is a potential benefit of debt consolidation?

Lower interest rates on loans and credit cards Signup and view all the answers

What is a common factor that directly affects your credit score?

Amounts owed Signup and view all the answers

What does APR stand for in credit terminology?

Annual Percentage Rate Signup and view all the answers

What type of credit report information does not affect your credit score?

Your race, color, or nationality Signup and view all the answers

How often should you ideally check your credit report?

Once a year Signup and view all the answers

What entity collects information on your credit history and compiles it into a credit report?

Credit bureaus Signup and view all the answers

What is considered a 'good' credit score?

700-850 Signup and view all the answers

What type of information is NOT found in your credit report?

Your current salary Signup and view all the answers

What is 'debt consolidation'?

Combining multiple debts into a single debt with a lower interest rate Signup and view all the answers

Why is it important to have a good credit history?

To improve your borrowing options Signup and view all the answers