There’s nothing like a few true/false questions to really get your blood pumping! Check out today’s blog full o’ trivia to test your knowledge about credit and credit scores. You may find a few surprising ways that you can help or hinder your credit, as well as a few things you may have THOUGHT impacted your score but don’t. AH! THE SUSPENSE!
You can never have too much knowledge about credit, since it plays a big part in the force that makes finances go-round. So read on, sharpen your credit trivia skills – and if we missed a juicy true/false item, please share your idea in the comments below!
Tip: Hover your mouse over the images to reveal the answers!
1. Paying your electric bill on time will boost your credit score.
Although it’s always important to pay your bills on time (and keep those lights on!), the electric company will only report your behavior to credit agencies if you default on your payments. Keep up the good work, and they’ll have no need to name you! Answer: False
2. Sparse credit history may disqualify you for a new phone.
These days, phones can be a costly investment – which is why phone retailers want to make sure you’ll make good on your payments for their product and service! A positive credit score may help qualify you for the phone and plan you’d like (and on the flip side, a sparse credit history may mean disqualification, an extra deposit or other restrictions). Answer: True
3. Late movie and game rentals can lower your credit score.
You may think movie and game rentals aren’t serious enough to affect your credit score, but these items represent an agreement between you and the rental company. If you don’t return your items on time, you may find these unpaid items reported to credit agencies, where they can negatively impact your credit score! Answer: True
4. Minimum payments on your credit card will pay off your balance in one year.
If only it were that easy. Unfortunately, minimum payments will stretch your pay-off date much further than a year – which means you pay more in interest and stress. Chip in all that you can each month to lower your debt balance, raise your credit score and enjoy a better peace of mind! Answer: False
5. Closing old credit cards will boost your credit score.
Although it seems nice to have old credit cards off your plate, the longevity of these accounts may actually help boost your credit score! Credit agencies see older cards as a representation of your payment history and commitment to good behavior. Answer: False
6. You’re entitled to one free credit report per year.
Do yourself a favor and take advantage of this perk. It can help you understand your credit standing and spot fraud on your accounts! Answer: True
7. When you apply for a loan, the lender cannot tell you your credit score.
Ask away! If you’re curious of your credit score (and you should be!), your lender is obligated to share this information with you. After all, this score will influence the rate and term of your loan! Answer: False
8. Bankruptcy will erase your federal student loan debt.
In some cases, bankruptcy may have a cleansing effect of your debt record – but with federal student loans that isn’t the case. These puppies stick with you forever, so make sure you’re on top of those important payments! Answer: False
9. Opening a “payday” or “pawn shop” loan and repaying it will help build your credit score.
Nope! Just like with your electric bill, these companies will only report your behavior if it is negative. If you’re looking to build your credit score in a more effective way, check out a ‘secured credit card’ for a safe and simple means to do so. Answer: False
10. Your payment history makes up 75% of your credit score.
Thankfully, there are many more factors than this! Your credit score consists of payment history, types of loans, their longevity and much more. For the best score, you must show diversity and positive behavior over an extended time! Answer: False
11. Your unpaid debt is erased when a collections agency stops calling you.
NOOOOOOOOOOOOOOO! If a collections agency stops calling you, it’s likely because they’re pursuing other avenues for payment. You won’t escape this debt, so it’s always better to seek help in confronting it (and your local credit union can help you figure out a positive payment plan). Answer: False
12. Your credit score may impact whether you’re hired for a job.
Employers in many industries consider your credit score a reflection of how responsible you are. Maintain that credit score and you’ll be more likely to qualify for a variety of jobs! Answer: True
13. A low credit score is irreparable.
Don’t despair – in the finance world, there is always a positive path to take. If your credit score is low and you don’t know where to turn, seek advice from a trusted friend or financial institution. We can help you take small steps that lead to big improvements in your score. Answer: False
Surprised by some of these answers? Want to learn more about credit? Check out one of our FREE financial education classes offered online and in-person.
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