Which of the following organizations determine your credit rating?
Experian, Equifax and TransUnion
Visa, Mastercard, and American Express
Citibank, Bank of America and Wachovia
Your bank View Answer
Correct Answer: Experian, Equifax and TransUnion
While many consumers have never heard of these companies, they keep track of your credit rating (FICO score). In turn, your FICO score may determine how much you pay for a mortgage, whether you get an apartment and even whether you get a job. Federal regulations allow you to obtain one free credit report from these companies each year. It’s a good idea to check your credit report regularly so you don’t get surprises later.
How often can you obtain a free credit report?
Whenever you want
Once a month
Once a year
More than once a year under certain conditions View Answer
Correct Answer: More than once a year under certain conditions
Federal law requires that each of the nationwide consumer reporting companies—Equifax, Experian, and TransUnion—provide you with a free copy of your credit report at your request every 12 months. Even if you have received a free report in the last 12 months, you can get another if you have been turned down for credit, insurance, or employment and you request the report within 60 days of denial. Though annualcreditreport.com is the only authorized website for submitting a request for a free credit report, you may also call 1-877-322-8228 to request a free credit report.
What percentage of credit reports contain errors?
10%
30%
60%
80% View Answer
Correct Answer: 80%
Your credit score can affect how much you pay for mortgages, loans, car insurance, and even whether you get an apartment. A study showed that the vast majority of the reports contain errors and 25% contain errors serious enough to affect someone’s credit rating. A good idea is to request a free credit report to check for errors. A free report can be requested at www.freecreditreport.com or by calling 1-877-322-8228.
Which is most likely to improve your credit rating?
Opening new credit accounts
Spreading debt over many credit cards
Not missing payments
Keep balances low on credit cards View Answer
Correct Answer: Not missing payments
Improving your credit score can lead to lower interest rates on home mortgages and credit cards, and lower car insurance costs. In order to most effectively limprove your credit, understand what makes up your credit score. Your credit score is comprised of: your payment history (35%), amount of your outstanding debts (30%), the length of your credit history (15%), the amount of new credit you have (10%), and the type of credit you have (10%). Not missing payments will do the most to improve your credit. While most people think that opening new credit accounts in order to have a large amount of available credit is helpful, this could actually lower your credit score. In addition, having small balances on a large number of cards could be seen as a bad sign.
What is the single most important factor in determining whether you will get a loan?
Income level
Home ownership
Amount of debt
FICO score View Answer
Correct Answer: FICO score
Your credit rating is actually a number determined through a formula developed by the Fair Isaac Corporation (your FICO score). Most credit card companies and lenders utilized your FICO score to determine you eligibility for a loan as well as the interest rate you are charged. More than any other factor, this score can determine both whether you get a loan and how much you pay. Having a low FICO score can cost over $6,500 in extra interest payments on a loan for a $20,000 car.
How long does a bankruptcy claim stay on your record?
1 year
5 years
10 years
15 years View Answer
Correct Answer: 10 years
Having a bankruptcy claim on your record can seriously damage your ability to obtain a credit card or a mortgage for up to 10 years. Before declaring bankruptcy, you should examine a number of loan packages and legitimate credit counseling services that provide assistance towards meeting financial obligations. Poor credit can severely impact your quality of life. It could result in higher interest payments, and not being able to obtain a loan or buy a house. Poor credit could even keep you from getting a job because many employers check credit history.
View Answer