Credit Abuse Pop Quiz
Take a quiz about buying on credit and test your consumer knowledge.
1. TRUE or FALSE: The ability to obtain a job, car and/or home loan critically depends on your credit history and score.
Answer -- True
2. What does FICO stand for?
a) Federal Insurance Credit Organization
b) Fair Isaac Corporation
c) Financial Income Credit Office
d) Fair Interest Consumer Organization
Answer -- B
3. What is a FICO score?
a) It keeps a report card of your late payments and debt.
b) It punishes consumers for going over their credit limit.
c) It's a three-digit number that determines the interest rate you will pay on your credit
cards, car loans and home mortgages or whether you will be able to get a cell phone or
have your application for a rental apartment accepted.
d) It offers credit cards.
Answer -- C
4. What is the biggest factor in determining your credit rating with lenders?
a) income level
b) home ownership
c) amount of debt
d) FICO score
Answer -- D
5. The average amount of time it takes to "clean up" a negative credit history is:
a) 2-3 years
b) 12 years
c) 7 years
d) 10 years
Answer -- C
6. TRUE or FALSE: A higher FICO score puts you in line for a lower interest rate on a loan or credit card.
Answer -- True
7. TRUE or FALSE: High school students are considered to be one of the "easier" targets by credit card companies because the companies know that students are uninformed and ready to spend.
Answer -- True
8. TRUE or FALSE: The only way to avoid credit card debt is to never use your credit card.
Answer -- True
9. TRUE or FALSE: You will never have to pay interest on your credit card if you pay your balance each month.
Answer -- False*
*If you take a cash advance off your credit card, you will have to pay interest on that cash advance.
10. Always use cash, not credit cards for:
a) emergencies, food, and movie tickets
b) food, movie tickets and anything less than $10.00
c) Internet shopping, emergencies and gas
d) gas, anything less than $50.00 and movie tickets
Answer -- B
11. If you charge $5,000 on a credit card at 20 percent and make the minimum monthly payment of 5 percent of the balance, how long will it take you to pay off the balance?
a) 6 months
b) 1 year
c) 7 years
d) 120 months
Answer -- D
12. By the end of a college student's freshman year, he/she will have accumulated an average of _________ in credit card debt alone.
a) $1,500.00
b) $500.00 - $800.00
c) $500.00
d) $50.00
Answer -- A
13. What will you owe if you pay your credit card balance after the due date?
a) a late penalty
b) interest on your entire balance
c) both of the above
d) neither of the above
Answer -- C
Source: Credit Abuse Resistance Education (CARE) Program
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