In each of the following cases find some ways to help this person improve their credit score. 1. Sherman is headed off to college this year. He took an extra year in high school in order to play sports a little bit longer. This gamble has paid off, and he is now headed off to college with a partial baseball scholarship. He knows that sometime soon he will have to replace the old pickup truck that his uncle gave him in high school, but he certainly does not anticipate being able to buy a new car with cash until well after college. He has never used a credit card before. What might he do to increase his credit score in anticipation of buying a car in the next several years? 2. The Brown family wants to refinance their house, but before they do this they want to see if there is any way to improve their credit score to lower their rate. They have a savings of $5,000. Their total monthly income is around $3,000 after taxes. Mr. Brown is thinking about quitting his job in order to finish his bachelor's degree. This will reduce their monthly income substantially. They also have several department store credit cards that have an outstanding balance of $600. What are some things they could do to increase their credit score? 3. Shannon is looking to buy her first house. Since she knows that her credit score could have a big impact, she wants to improve hers as much as possible. She has a number of credit cards that she pays regularly. She couldn't pay them off right now, but she just got an offer in the mail for a new credit card that has no interest or fees on balance transfers. This change would dramatically lower her monthly payments. Since she has an erratic work schedule, she has also had trouble paying her bills on time. What can she do to improve her credit score? 4. Most adverse events (like late payments or collections) can only stay on your credit history (and therefore affect your credit score) for seven years. Answer the following questions: Do you think it is reasonable for there to be a limit on the length of your credit history? Why or why not? If you could change the number of years what would you recommend? 5. How would you expect your credit score to be affected if you are a co-signer on another person's loan? 6. For each of the following, explain whether this action will increase or decrease your credit score and why: a. Paying off some of your outstanding debt b. Taking out a new credit card c. Setting up automatic bill pay d. Buying a house e. Checking your full credit history online f. Increasing your maximum credit available