The Cost of Credit Answers

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This year, Mr. Thomas has a higher credit score than he did last year. Which of the following should Mr. Thomas expect with the improved score? Check all that apply.

A
a more difficult time borrowing money to buy a house
B
an easier time getting a car loan
C
an easier time renting an apartment
D
a denial when opening a bank account
E
higher interest rates on credit cards
3

Kendrick is planning to buy a house. Which explains why he should establish a positive credit history before buying the house?

A
He will get the house for a lower price.
B
It will be easier for him to get a loan to buy the house.
C
He will be able to get a higher interest rate when buying the house.
D
He will be able to find a house he likes more quickly.
4

Yoko is buying a car from a local car dealership. She wants to get the lowest interest rate possible. Which will most likely help her get the lowest interest rate?

a
asking nicely
m
making sure she has a positive credit history
e
explaining that she has many outstanding loans
s
showing her driver’s license
5

Before applying for a credit card, Jacob examines his credit report. Which explains why Jacob might examine his credit report?

t
to determine which company has the best credit card features
t
to determine if he has a history of good credit
t
to determine if he needs a credit card
t
to determine his credit limit
6

Fido wants to buy a new car. He will need to get a car loan. Fido decides to wait for a few months until his credit history improves. Which explains whether Fido is making a sensible decision?

A
Fido’s decision is sensible because the selling price of the car should be less in a few months.
B
Fido’s decision is sensible because the cost of the car loan should be less if his credit history improves.
C
Fido’s decision is not sensible because he needs the car right away.
D
Fido’s decision is not sensible because it does not matter if he buys the car now or in a few months.
7

Dahlia is explaining to her sister why a positive credit history is important. Which of the following should Dahlia give as reasons for a positive credit history? Check all that apply.

A
A good credit history portrays irresponsibility.
B
A good credit history results in lower interest rates.
C
A good credit history makes borrowing easier.
D
A good credit history results in higher interest rates.
E
A good credit history may result in denial of a rental application.
9

Lois bought clothing at a store. She did not have enough in her bank account to pay for the purchase. After receiving the bill and paying off the balance, she realized that she paid $9.69 in interest. Which statement is true about her method of payment?

L
Lois used a debit card to make the purchase.
L
Lois used a credit card to make the purchase.
L
Lois either used a debit card or used a credit card and paid the balance in full when the bill arrived.
L
Lois either used a debit card or used a credit card and made a single payment.
10

Which helps to establish a negative credit history?

M
Make payments on or before the due date.
N
Never miss a payment.
P
Pay off the full amount with the first monthly statement.
P
Pay less than the minimum amount due.

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