Question

Of the following, which statement or statements accurately represent possible effects of a long-term credit purchase on your credit score?
l. Showing a willingness to pay high interest rates increases your score
ll. Making only minimum payments for an extended time can hurt your score.
Ill. Regularly paying off a credit balance can boost your score.

a. I and Ill

b. ll only

c. ll and I

d. l, ll, and III

Answer 1

C is the correct answer. Statements II and III are true. Making minimum payments suggests you are not earning enough money to pay off the bulk of your debt, only that you are managing to stay afloat. Regularly paying off your credit balance, however, demonstrates that you are financially able to support yourself.