What step should Colin take next to establish credit? Obtain a loan and pay it off immediately Open one or two credit cards After shopping around, Colin filled out an application for a credit card that has a relatively low interest rate and does not charge an annual fee. He found the application online and was asked to provide basic information about himself, his job and employer, his income, and any other existing debt obligations. What happens once the application is submitted to the credit card company (e.g., the bank or retailer)? The credit bureau has the final say regarding whether the application for credit is approved or rejected. The lender performs a credit investigation, based on information from the credit bureau. Colin applied for a credit card that fits his requirements and was approved. The lender pulled his credit report from each of the Big Three" national credit bureaus during their credit investigation and made them available to Colin. He's heard people talking about the importance of the FICO score in a credit report, and Colin wonders what his score is. When he reviewed his credit reports, he sees that his score is zero. Should Colin be worried that his FICO score is zero? Yes No What is a signal that Ben is overusing his credit and may experience several financial problems if he doesn't change his behavior? He has little to no savings He receives a credit card statement every month Ben has quite a bit of consumer debt, and he's trying to take control of his finances. He wants to keep a positive attitude, since he knows he needed to borrow money to get through college, to buy a car so he could get a job, and make ends meet until he starts earning a real living. Ben wants to allocate an extra $100 per month to pay down the principal on his debt, and he wants to target the debt obligation with the highest interest rate. Which debt should Ben apply the extra money towards first? O Student loans Credit cards Ben just went through the mail that he let accumulate on the kitchen counter for several days. He's opened several credit card statements, and he just finished putting the due dates into the calendar in his cell phone, with alarms to remind him when to send in his payments. He realizes that each credit card statement he receives gives him 21 days from the statement date to pay. What legislation requires credit card statements to be sent out at least 21 days before the due date? The Fair Credit Reporting Act The Credit Card Act of 2009 Ben appreciated his friend Alison's help with preparing his personal financial statements and helping him to understand how to use budgets in his financial planning. He knows his liabilities exceed his assets, and he has a negative net worth. If Ben wants to become solvent again, what types of transactions should he not undertake using credit? Furniture or a new computer Utility bills and other basic living expenses Ben has accumulated a lot of credit card debt over the years, but somehow he always manages to qualify for more credit. He has opened several credit cards that offer an introductory zero percent interest rate that he wants to use to pay off other credit cards. Even though the principal balance of his debt seems overwhelming at times, he always makes sure that he at least pays the minimum balance when due. What does Ben have that makes it easier for him to obtain more and more credit? Collateral Capacity What step should Colin take next to establish credit? Obtain a loan and pay it off immediately Open one or two credit cards After shopping around, Colin filled out an application for a credit card that has a relatively low interest rate and does not charge an annual fee. He found the application online and was asked to provide basic information about himself, his job and employer, his income, and any other existing debt obligations. What happens once the application is submitted to the credit card company (e.g., the bank or retailer)? The credit bureau has the final say regarding whether the application for credit is approved or rejected. The lender performs a credit investigation, based on information from the credit bureau. Colin applied for a credit card that fits his requirements and was approved. The lender pulled his credit report from each of the Big Three" national credit bureaus during their credit investigation and made them available to Colin. He's heard people talking about the importance of the FICO score in a credit report, and Colin wonders what his score is. When he reviewed his credit reports, he sees that his score is zero. Should Colin be worried that his FICO score is zero? Yes No What is a signal that Ben is overusing his credit and may experience several financial problems if he doesn't change his behavior? He has little to no savings He receives a credit card statement every month Ben has quite a bit of consumer debt, and he's trying to take control of his finances. He wants to keep a positive attitude, since he knows he needed to borrow money to get through college, to buy a car so he could get a job, and make ends meet until he starts earning a real living. Ben wants to allocate an extra $100 per month to pay down the principal on his debt, and he wants to target the debt obligation with the highest interest rate. Which debt should Ben apply the extra money towards first? O Student loans Credit cards Ben just went through the mail that he let accumulate on the kitchen counter for several days. He's opened several credit card statements, and he just finished putting the due dates into the calendar in his cell phone, with alarms to remind him when to send in his payments. He realizes that each credit card statement he receives gives him 21 days from the statement date to pay. What legislation requires credit card statements to be sent out at least 21 days before the due date? The Fair Credit Reporting Act The Credit Card Act of 2009 Ben appreciated his friend Alison's help with preparing his personal financial statements and helping him to understand how to use budgets in his financial planning. He knows his liabilities exceed his assets, and he has a negative net worth. If Ben wants to become solvent again, what types of transactions should he not undertake using credit? Furniture or a new computer Utility bills and other basic living expenses Ben has accumulated a lot of credit card debt over the years, but somehow he always manages to qualify for more credit. He has opened several credit cards that offer an introductory zero percent interest rate that he wants to use to pay off other credit cards. Even though the principal balance of his debt seems overwhelming at times, he always makes sure that he at least pays the minimum balance when due. What does Ben have that makes it easier for him to obtain more and more credit? Collateral Capacity