Credit and Debt Quiz

Q.1

Being in debt does not hurt your credit score as long as you pay your bills on time.

True
False

Q.2

Your credit score is determined by the following six factors;

1. your payment history
2. if you've ever declared bankruptcy
3. how much money you owe
4. how long you've had credit
5. the type of credit you use
6. if you're trying to get more credit

True
False

Q.3

In question #2 above, the first 3 factors have the greatest impact on your credit score

True
False

Q.4

The better your credit score is, the more likely you are to get a favourable interest rate on a loan

True
False

Q.5

Negative information that may affect your credit score can stay in your credit report for up to __ years

4 years
7 years
10 years

Q.6

With credit cards, you must pay off your charges each month. If you don't, you'll pay interest on the full amount you owe (not just the balance outstanding from the prior month)

True
False

Q.7

If you take out a cash advance from your credit card...

You are charged a fee but no interest if you pay it off the next month
You are charged a fee and interest from day 1 (there is no grace period)

Q.8

Paying off debt has no impact on building wealth

True
False

Q.9

It is smarter to incur debt for things that decline in value (rather than increase in value)

True
False

Q.10

When deciding on whether to pay down debt or invest, consider

1. interest rates on debt and investments
2. income tax consequences
3. job security, employer incentives & personal preferences
4. #1 & #3
5. #1, #2 & #3

Q.11

Borrowing money to buy stocks in large, stable companies involves some degree of risk

True
False

Q.12

It's always smart to take out the maximum amount of mortgage that the bank has approved you for

True
False

Q.13

The longer you take to pay off your mortgage, the more interest you will pay

True
False

Q.14

The longer the amortization period of your mortgage is, the higher your mortgage payments will be

True
False

Q.15

Paying down your mortgage biweekly rather than monthly can save you a large amount of interest over the life of your mortgage

True
False

Q.16

If your credit score is good, consolidating multiple debts can reduce your number of payments and interest costs

True
False

Q.17

You have $1000 balance on your credit card with an interest rate of 20%/yr. If you pay $50/month, your balance will be repaid in;

< 20 months
20 months
> 20 months

Q.18

In Q#17 above, the total amount of interest you will pay is;

<$200
$200
>$200

Credit & Debt Quiz