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By Jean-Paul Commisso | Broker in Dix Hills, NY
  • What Impacts Your Credit Score? Take This Quiz and Find Out

    Posted Under: Home Buying, Financing, Credit Score  |  April 3, 2013 10:53 AM  |  44 views  |  No comments

    Do You Know What Impacts Your Credit Score? Take This Quiz and Find Out

    According to credit experts, 42% of U.S. consumers have credit scores between 550 and 699. As a result, these consumers typically don’t qualify for preferred interest rates and, depending on their overall credit profile, they may not even qualify for certain loans and credit cards.

    I have worked with many clients throughout my years in the business and have seen first-hand how credit scores can wreak havoc on securing a favorable mortgage. Most clients we work with don’t have a clear picture of what impacts their credit profile and, more importantly, don’t know what steps they can take to help improve it. We find this short quiz, from credit consultants ApprovalGuard.com, to be immensely helpful when it comes to understanding how your credit profile works. Take a few minutes to see if your credit knowledge is up to par.

    1. To have the best credit-profile impact, what is the maximum amount of your monthly credit line that should be used?
    a) 70%
    b) 30%
    c) 50%

    2. What is the number-one contributing factor to a good credit score?
    a) Length of credit history
    b) Amounts you owe
    c) Payment history

    3. If you pay 2% each month on your credit card (typical minimum payment), when will you pay off a $3,000 balance at 10% interest?
    a) 18 years
    b) 6 years
    c) 3 years

    4. After paying off a high-interest credit card, you should:
    a) Continue using it occasionally
    b) Close the account
    c) Use the full amount of available credit every month

    5. Applying for credit cards in order to just receive a free sign-up gift (t-shirts, mugs, etc.) has no impact on my credit profile?
    True or False

    6. Rewards points on credit cards are a good deal when:
    a) I get cash back
    b) I get free airline tickets
    c) I carry no balance each month

    7. To have a credit score, I must have at least one creditor reporting activity on my credit report for:
    a) 12 months
    b) 8 months
    c) 6 months

    8. Credit bureaus that manage your personal credit report data and credit scores are a:
    a) Government entity
    b) Non-profit agency
    c) Regular business corporation

    9. Banks and credit card companies think you are creditworthy by how many credit offers you receive by mail?
    True or False

    10. Credit scores are used by lenders mainly to:
    a) Tell how I compare to other consumers
    b) Tell if I make my payments on time
    c) Predict the likeliness that I will repay my loan on time

    Answers: 1 – c, 2 – c, 3 – a, 4 – a, 5 – False, 6 – c, 7 – c, 8 – c, 9 – False, 10 – c
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