Credit Report and Credit Score Quiz! (aww yeaaah)
Today's all about testing your Credit IQ. Do you know what makes up that three digit number known as your credit score? Or how about what's IN your credit report? Overall I'm pretty good about checking it once a year and staying on track of it, but I could certainly pay a little more attention. It's just soooo boring, ya know?!While I'm fortunate enough to have a decent credit score (it hovers around 750), it just so happens I actually don't know as much as I thought ;) I'm a big fan of having FUN while learning, so I thought I'd share a quiz that Credit Karma emailed over (this isn't a sponsored post or anything). Hopefully you get out of it as much as I did! Just please beat my pitiful 5 out of 10 right, okay? Ugh...
Credit IQ Quizz:
1) What is the average credit card debt?
- $5000
- $7000
- $8000
- $10,000
- $100,000
- $1 million
- $500,000
- $750,000
4) What component weighs most on your credit score?
- Length of credit history
- Credit utilization
- Total accounts
- On-time payment History
- Credit Utilization
- Length of credit history
- On-time payment history
- All the above
7) You can improve your credit score by
- Closing credit cards you don't use
- Not using your credit cards
- Reviewing your credit report regularly and correcting any errors
- Not paying your bills on time
- Yes
- No
- It depends
- Trying to secure a home loan
- Applying for a job
- Applying to rent an apartment
- All of the above
Quiz Answers: (Good luck!)
1) C. $8000. The average consumer has $8,000 in credit card debt. Credit cards can be a slippery slope of spending beyond your means if you aren't careful. Most consumers don't realize paying the monthly minimum will keep us in debt for dozens of years.
2) B. $1 million - A good credit score qualifies you for better interest rates on home loans, car loans and student loans. Over the course of a lifetime, these interest fees can really add up.
3) True. Length of credit history, credit utilization, total accounts, on-time payment history and credit inquiries are the only components of a credit score. You can learn more about the impact each of these has at www.creditkarma.com/report.
4) D. On-Time payment history. On average, a person with perfect on-time payment history has a credit score over 700. However, make just one late payment and your credit score can drop 50 points.
5) D. All of the above - Credit utilization, length of credit history and on-time payment history are all important components of a credit score. Having a bad grade in one area can have a huge impact on your credit score.
6) True - Credit card utilization is defined as the total credit card debt you have divided by the total available credit on your credit cards. High credit card utilization can be a warning sign of credit risk. According to Credit Karma consumers with a 0% credit card utilization had a credit score 73 points lower than consumer who had a credit card utilization of 1-20%.
7) C. Credit reports are rich with data and often have a error or two. If you contact credit reporting agencies and have incorrect information removed, you may improve your score. Avoiding credit entirely means you'll have no credit history, which will may it harder to get a loan.
8) C. It depends. Hard inquiries pulled by lenders do have an impact on your credit score, but soft inquiries don't. When you pull your credit score simply for information purposes through your written authorization, it is considered a soft inquiry and has no impact on your actual credit score.
9) D. All of the above. Employers and renters are more apt to check your credit file before offering you a job or a place to live. To get your credit in top shape, it's essential to maintain a low debt to credit ratio.
10) False. That used to be true prior to the recession. Currently, the average American has a credit score that comes in right around 690, but, even a 690 credit score provides no guarantees when it comes to getting a loan. With the current state of the economic climate, banks are much less likely to even lend to good credit consumers and when they do it's often at a higher price.
Analysis: (How did you do?)
If you missed 0-2 questions, you know credit. You understand the important of being a smart credit use and likely have a high credit score.
If you missed 3-4 questions, you're doing ok. You likely have an average credit score and understand the importance of paying bills on time.
If you missed more than 5 questions, chances are your credit is in need of improvement and you should start taking steps towards responsible credit use. (well, that or you HAVE a good score and thus you don't manage it as well as maybe you should. Or at least that's what I'm taking from it ;) )
Labels: credit report, credit score, tools and resources
posted by J. Money at
8:47 AM
13 Comments:
My credit score is zero. I know the importance of not being a slave. I am not buying into the you must be a slave in order to enjoy life anymore. No more borrowing for us!
What up J? Hope all is well man!
I got a 7/10
I also got a 7/10. :)
You guys are awesome. I'll have to re-take it and see what I get ;) haha...
@Brad - Zero? I don't think that's possible my friend...please explain. And no complaints over here, life is good :) you?
I'm not gonna lie. I skipped down to the answers, because I just don't memorize that stuff (like $8k as the average CC debt)
Alls I know, is that I don't have CC debt (never have, never will) and I always check my score each year
I guess I should have said I have NO score. They do not have any info to formulate a score for me since I paid off all the debt in my name over a year ago. You have to borrow money in order to have a score. Essentially it is an I LOVE debt score.
I still check my credit report for fraud but I do not make financial decisions based on my financial slave number so that number doesn't mean anything to me. :)
Told ya I H8 DEBT! Did you know you could still get a mortgage without a FICO score? You can!
I got 6/10 but I agree with Brad in that I hate debt, and plan to never use credit again!!! We'll see... :)
(1) and (2) are "fun facts" to know, but (having gotten them wrong) seem to be details I really don't need to know. Esp that number (1), so long as my recurring CC debt remains zero.
Joe
@Brad - Hmmmm I'm going to have to respectfully disagree with you sir.
a) I could be wrong, but unless you've had absolutely zero credit history for the past 6-7 years, you have some sort of a credit score (whether it's 400, 600, 750, etc.) In fact, you probably have a good one! :) It's wonderful that you paid off all your debt in full, but most of it is still tracked. (btw, there's some good info here on it - like you can have a 0 if you've been convicted as a felon! haha...who knew?)
b) You never plan on taking out a loan again? Not even to buy a home, re-finance, buy a new home, car, etc? These days, even employers are known to check it out to see what they're getting.
I commend you for shying away from debt, but there's no shame in holding an excellent credit score - it could help you in ways you might not even realize down the road.
That's okay J! I realize that my take isn't very popular in today's world but I assure you I have no score. When we tried to re-fi the house, I was shown the actual paper that declared I was scoreless. I will admit that it happened a little faster than I expected. I knew it was possible because Dave Ramsey doesn't have a FICO score either but he hasn't borrowed money in over 20 years. I'll have to locate that piece of paper stating that they do not have enough info to calculate a score for me. Last year, a month after paying off my last debt, my score was six hundred something.
Again, I know it blows minds, and I often get the "it's not possible" remark, but yes we will not be borrowing anymore money. In order for that to change I will have to be diagnosed with EXTREME brain damage, which I guess could happen, we'll see. LOL
Mortgage- No we will not be buying another house by getting a mortgage. After the one we have now is sold or paid off that is it...no more debt dude! With your savings habits, you should really check out mytmmo.com because there are so many people that have done this. The average time it takes people on a tmmo to complete baby step six (pay off house) is seven years. That is after saving 3/6 months of expenses, saving 15% of income for retirement, AND funding kids college. If someone can do all that in less than seven years it proves that it can be done. A worst case scenario for someone with no debt wanting to purchase a house is that if they focus with complete intensity on saving to buy a house, they can do it in 7 years. Renting for seven years in exchange for owning your house because you paid cash is priceless dude. Not to mention YOU DON'T HAVE A MORTGAGE PAYMENT! Think of how fast you could fund your retirement, savings, and build wealth etc J! Just a thought dude.
For those of you wondering though, you can also get a mortgage without using your FICO score by something called manual underwriting. It is the way they used to do it and it bases everything on actual personal criteria. (job, how long there, income level, references, etc) If you can't be talked out of mortgage get a traditional 15 year mortgage instead of a 30. J, a re-fi isn't borrowing more it is just an adjustment, so in my opinion that is okay and doesn't conflict with my beliefs.
Car- I know you're kidding about this one! Aren't you? Hellz no I am not borrowing money to get a new car. I H8 DEBT dude! Borrowing money to obtain a car whether new or used is nonsense. Nonsense that we have accepted for too many years, but no longer. Cash money baby! Another goal of ours is NOT to buy a "new" car until we have a net worth of a million. Experienced cars will be fine for us until then. Buying a new car off of the lot is NEVER smart unless you have that much money to throw away since the car loses it's value so fast.
I think it is rather ridiculous to tell anyone that they have to go out and borrow money to be considered responsible. The only scenario that I have found that is bulletproof, is having a FICO score for military security clearance for certain high level positions. Other than that I will not be working for any company that requires or checks credit. I am starting my own business and the truth is that even if I needed to work somewhere else, every company does not do anyway.
There's no shame in not buying into the whole credit score nonsense either. If someone is responsible enough to pay for everything in life by using cash without having to borrow money, shouldn't that be considered responsible too? The FICO score is a way to keep people in debt and borrowing money. I am not walking the line anymore!
Sorry this was so long dude! {Stepping down from soapbox}lol
:-)
Holy moly! Nicely played my friend :) You have given me quite a bit of food for thought here, I'll have to let it digest for a bit. You should actually copy and paste this into a new post for your site! haha...oh man you crack me up.
In all seriousness though - good for you brother. Your excitement and willingness to pump people up about it is refreshing, keep doing your thing!
ps: i dare you to get "H8 DEBT" as a license plate ;)
You dare me? The Enemy Of Debt? Go check your gmail my friend, and let me know what you think...
:O
Credit score is the method by which we can find our financial soundness. Good credit score range from 300 to 850. It will help you to take decision while shopping and saving. For lenders it will help him to decide interest rate, the more score you have, the more reliability you have. Lender can charge you more if he is using any other method for scoring. Credit Score statement might not be refreshed and you could be following the older ratings. Lender could have their own measurements of charging the interest and counting the credit score, you force him to follow the general and standard rates. These all are the guidelines for of the credit score statements.
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