Credit Score : 5 Questions To Test Your Financial IQ
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Q: What is the name of the credit score model that is used by 90% of top lenders in credit decisions?
A) FICO
B) VantageScore
C) Equifax
D) TransUnion
Answer: A) FICO
Q: What are the two most important factors that affect your credit score according to the FICO model?
A) Payment history and credit utilization
B) Credit mix and new credit
C) Length of credit history and inquiries
D) All of the above
Answer: A) Payment history and credit utilization
Q: What is one of the fastest ways to improve your credit score if you have high credit card balances?
A) Paying down your credit card balances to keep your overall credit use low
B) Transferring your balances to a new card with a lower interest rate
C) Closing your old credit card accounts to reduce your available credit
D) Applying for more credit cards to increase your credit limit
Answer: A) Paying down your credit card balances to keep your overall credit use low
Q: What is one of the benefits of becoming an authorized user on someone else’s credit card account?
A) You can benefit from their positive payment history and increase your average age of accounts
B) You can use their credit card without being responsible for paying it back
C) You can access their personal information and monitor their spending habits
D) You can improve your credit mix by adding a different type of credit account
Answer: A) You can benefit from their positive payment history and increase your average age of accounts
Q: What is one of the drawbacks of closing old credit card accounts or applying for too many new ones?
A) You can lower your average age of accounts and increase your hard inquiries, which can hurt your credit score
B) You can lose the rewards and benefits that come with those cards, such as cash back or travel points
C) You can trigger a penalty fee or an interest rate hike from your card issuer
D) You can damage your relationship with your card issuer and lose their trust
Answer: A) You can lower your average age of accounts and increase your hard inquiries, which can hurt your credit score
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