7 Questions to Test Your Credit Score Knowledge

Your credit score is an important part of your financial life. A good score can help you qualify for the best credit cards (like the one with the travel perks you’ve been eyeing) and get the best rates on things like a personal loan, a car loan or a mortgage. Insurance companies and landlords may check it to ensure that you are fiscally responsible.  

So, how much do you know about credit scores? Take this quiz to find out how you stack up. The answers might even help you improve your score.  

1. True or false: You only have one credit score.   

A. True 

B. False 
 

2. Having multiple kinds of credit, such as credit cards, personal loans, auto loans, mortgages and/or student loans will 

A. hurt your credit score. 

B. improve your credit score. 

C. not impact your credit score in any way. 

D. give you a headache. 

 

3. True or False: Maxing out your credit card won’t hurt your score as long as you make your payments on time.  

A. True 

B. False 

 

4. Canceling an old credit card 

A. could hurt your credit score. 

B. will improve your credit score. 

C. has no impact on your credit score. 

D. is something you should always do after you pay off a card.  
 

5. A bankruptcy no longer impacts your credit score after 

A. 8 years. 

B. 5 years. 

C. 7 years. 

D. 10 years. 

 

6. True or False: Checking your own credit score or credit report will hurt your credit. 

A. True 

B. False 
 

7. Applying for a number of loans or credit cards  

A. will hurt your credit score if you do it in a short period of time. 

B. will have no impact on your credit score. 

C. will not hurt your credit score as long so you don’t apply for lots of different types of credit in a short timeframe.  

D. could hurt your credit score depending on what types of credit you apply for and when you apply for it. 

Ready to take the next step? A financial advisor can show you how all the pieces of your financial plan fit together.

SO HOW DID YOU DO? HERE ARE THE ANSWERS: 

 

1. True or false: You only have one credit score.   

A. True 

B. False 

Answer: B – False 

It’s commonly thought that everyone has just one credit score, but that’s incorrect. You are probably familiar with your FICO score, which is the one about 90 percent of lenders check. The second most common is VantageScore, which was created by the three national credit bureaus, Equifax, Experian and TransUnion, in 2006. In addition, each of these three agencies can have slightly different information on your credit history, which can cause discrepancies in how your score is calculated.  There are also multiple creditors and services that use the agencies’ data but may internally calculate credit scores differently. 

2. Having multiple kinds of credit, such as credit cards, personal loans, auto loans, mortgages and/or student loans will 

A. hurt your credit score. 

B. improve your credit score. 

C. not impact your credit score in any way. 

D. give you a headache. 

Answer: B – improve your credit score. 

While balancing all this may give you an occasional (and hopefully, short-lived) headache, it will be worth it for the boost in your credit score. One of the criteria used to calculate your FICO score is your credit mix. This factor counts for 10 percent of your score. It’s deemed important because it shows creditors your ability to handle making payments on multiple types of credit accounts at the same time.  

3. True or False: Maxing out your credit card won’t hurt your score as long as you make your payments on time.  

A. True 

B. False

Answer: B 

The amount you owe accounts for 30 percent of your total FICO score. This category looks not just at how much you owe in total but also at how much of your available credit you’re using. Ideally, your credit utilization should stay below 30 percent. For example, if you have one credit card with a $10,000 credit limit, you should try not to charge more than $3,000 on your card per month. If you do carry a higher balance on your card, you might appear to be struggling financially — and that makes you a bigger risk.  

4. Canceling an old credit card 

A. could hurt your credit score. 

B. will improve your credit score. 

C. has no impact on your credit score. 

D. is something you should always do after you pay off a card.

Answer: A – could hurt your credit score. 

Canceling an old credit card would likely ding your credit score for several reasons. First, the length of your credit history makes up 15 percent of your total FICO score. If you cancel an older account, it no longer shows up in your credit history so you lose this positive metric. Second, it will lower your amount of available credit, thus increasing your credit utilization ratio, which (as mentioned above) should stay below 30 percent. Third, you could also lose points if you had a stellar payment history on that account. Since your payment history accounts for 35 percent of your score, having an account in good standing disappear could have a significantly negative impact your credit score.  

5. A bankruptcy no longer impacts your credit score after 

A. 8 years. 

B. 5 years. 

C. 7 years. 

D. 10 years. 

Answer E – Both C and D 

If you declared bankruptcy, you won’t have to suffer under the weight of having taken this action forever. After seven years, late payments, collections and Chapter 13 bankruptcies (a reorganization bankruptcy, where you can keep your assets) will no longer appear on your credit report and will cease to affect your credit score. But Chapter 7 bankruptcies (known as liquidation bankruptcies, where your assets are liquidated and sold) will stay on your credit report for 10 years. 

6. True or False: Checking your own credit score or credit report will hurt your credit. 

A. True 

B. False 

Answer: B – False 

Checking your own credit score is considered a soft credit check and will not impact your score in any way. You can check your FICO score by paying to access it on FICO’s website. There are also a number of different banks and credit card issuers that give you free access to your credit score if you’re a customer. But you can check your credit report for free once a year from all three credit bureaus. It’s easy to do and gives you an opportunity to see if there are any mistakes on your report.  

7. Applying for a number of loans or credit cards  

A. will hurt your credit score if you do it in a short period of time. 

B. will have no impact on your credit score. 

C. will not hurt your credit score as long so you don’t apply for lots of different types of credit in a short timeframe.  

D. could hurt your credit score depending on what types of credit you apply for and when you apply for it. 

Answer: D – could hurt your credit score depending on what types of credit you apply for and when you apply. 

Applying for any type of credit typically results in what is called a hard credit check. However, how much this will harm your credit score will depend both on what types of credit you’re applying for and the timeline of your applications. For credit cards, every separate application will likely lower your credit score. But if you’re applying for a loan or a mortgage and shopping around for rates, it will count as just one credit inquiry if you make all of those applications within a 30-day period. 

How many questions did you get right? Congratulations if you answered most of them correctly! If you didn’t, learning more about financial basics could help you improve your score and help you qualify for better rates. Go here for more articles about ways to improve your credit.