April is Financial Literacy Month – an ideal time to brush up on your financial education and life-long money management skills. To get started, let's take a look at your financial IQ.
Take our short quiz, with questions from Freddie Mac's 12-module CreditSmart® program, to see how your financial knowledge stacks up.
Ready, Set... Test!
Late payments can stay on your credit report for __ years
Late payments will stay on your credit report for seven years. Visit CreditSmart's Module 5: Establishing and Maintaining Good Credit to learn more.
How much money should I save for an emergency fund?
Answer: Six months of living expenses
The general rule of thumb is to have enough savings to cover six months of living expenses. Visit CreditSmart's Module 2: Managing Your Money to learn more.
Which item below is not included in your credit report?
Answer: Your income
Credit reports do not take your income into account. Visit CreditSmart's Module 5: Establishing and Maintaining Good Credit, to learn more.
You decide to buy a new $2,200 plasma TV. You take advantage of the store's special offer to receive an additional 10% off if you open the store credit card with an 18% Annual Percentage Rate (APR). If you make your minimum monthly payments of $50, how much will your TV ultimately cost once paid in full? (You may want to get your calculator out!)
You will have paid $1,046 in interest charges over the course of 5.1 years, bringing the real cost of your TV to $3,026.84. Visit CreditSmart's Module 5: Establishing and Maintaining Good Credit, in both English and Spanish, to learn more.
If you cosign a car loan for your son, is your credit rating affected if he is late or misses a payment?
As a cosigner, the loan obligation and your son's payment history will be part of your credit report. If your son is late or misses any payments, your credit score will be affected. Visit CreditSmart's Module 5: Establishing and Maintaining Good Credit to learn more.
You can be denied a loan because you are not married.
The Equal Credit Opportunity Act prohibits a person from being denied credit based on race, gender, national origin, marital status and receipt of public assistance. Visit CreditSmart's Module 5: Establishing and Maintaining Good Credit to learn more.
If there are errors on your credit report that you've reported to the credit reporting agency, they must take steps to investigate the disputed items.
The credit reporting agency must investigate disputed items within 30-45 days and provide you written notice of the results. Visit CreditSmart's Module 5: Establishing and Maintaining Good Credit to learn more.
For how long will a lender typically lock-in your mortgage rate before you buy your house?
Answer: 1-3 months
A lock-in, also called a rate-lock or rate commitment, is a lender's promise to hold a certain interest rate and points for you, usually for one to three months while your loan application is processed.
What are the four primary factors – often referred to as the "4 C's" – that lenders use to determine a person's creditworthiness?
Answer: credit, capital, collateral, capacity
The correct 4 C's are credit, capital, collateral, & capacity. See CreditSmart's Module 7: Thinking Like A Lender to learn more.
How often should you check your credit report?
Answer: Once a year
You should check your credit report on an annual basis to ensure there are no errors and to see if there have been any attempts to steal your identify. You can get a copy of your credit report from www.annualcreditreport.com. Visit CreditSmart's Module 5: Establishing and Maintaining Good Credit to learn more.
Score: out of 10 correct
Congratulations. You answered all questions correctly and are on a great track! You're on a good track, but may benefit from taking specific modules of our free CreditSmart online training courses. You're doing fine, but we think you'd benefit from taking our free CreditSmart online training courses, featuring 12 complete financial education modules.
CreditSmart Can Help You:
- Understand the importance of building credit to secure your financial future
- Gain insight into how lenders assess your eligibility for a mortgage loan
- Recognize the warning signs of predatory lending and scams
- Learn the steps to successful homeownership
- Safeguard your home and your finances against life's unexpected challenges
- Learn what to do if you ever have difficulty making your mortgage payments
Check out CreditSmart's online training, available in English and Spanish, and get started building sound financial literacy skills. It just makes sense.
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