Foolproof Module 6 Test Answers (2024)

FAQs

What was the main thing Vinnie did wrong? ›

What was the main thing Vinnie did wrong? He used one credit card to pay other credit card bills.

They almost always cost more than going to a bank, a credit union or a store. Some people have problems with debt after using these ways to borrow. The charges can be very high. It is hard to pay the money back and get out of debt.

If you don't pay your balance off in full each month, you'll accrue interest.

Why credit bureaus don't care about your income. Despite what many people think, your credit score is completely independent of your income. People with $20,000 salaries can have good credit scores, just like those with $200,000 incomes can have poor credit scores.

Risk-based financing is a way that lenders determine your interest rate for a loan based on how likely you are to repay that loan. Risk-based financing is illegal and cannot be used by companies. Because your credit rating is low, a company charges you more interest on a loan.

And although it helps to even pay off a portion of your debt, paying off the entire balance will have the biggest and fastest impact on your credit score.

1. Make On-Time Payments

Payment history includes on-time, late and missed payments, all of which are reported to one or more of the national consumer credit bureaus (Experian, TransUnion and Equifax). Always making payments on time can go the furthest to helping you improve credit.

It costs $30 to $50 in fees to transfer a $1,000 balance to a credit card, in most cases, as balance transfer fees on credit cards usually equal 3% to 5% of the amount transferred.

What happens if you make a late payment on a 0 interest credit card? ›

And if your payment is late, even by a single day, your card issuer could cancel the 0% offer and reset your card's interest rate to the ongoing APR. On top of costing you interest and late fees, missing payments could also end up hurting your credit scores.

In addition, you shouldn't use loan proceeds for purchases that will violate your loan terms, which may include gambling, tuition, a house down payment, or anything illegal.

If you typically carry a balance on your credit card from one month to the next, then making multiple payments during each billing cycle can reduce your interest charges overall. That's because interest accrues based on your average daily balance during the billing period.

1. Most important: Payment history. Your payment history is one of the most important credit scoring factors and can have the biggest impact on your scores. Having a long history of on-time payments is best for your credit scores, while missing a payment could hurt them.

Paying off your credit card balance every month is one of the factors that can help you improve your scores. Companies use several factors to calculate your credit scores. One factor they look at is how much credit you are using compared to how much you have available.

Final answer:

The 'bad money burns' in the options are buying luxury cars and gambling away savings because they lead to the wastage or loss of money.

Expert-Verified Answer

The major disadvantage of using credit cards to secure credit for his business is the potential accumulation of debt and high interest rates. Additionally, using credit cards for business transactions may pose a risk to Mr. Boyd's personal finances.

Expert-Verified Answer

The answer that best describes what happens in a money flip is that one side of the coin is randomly chosen to be the outcome when the coin is flipped and lands. In a money flip, typically a coin is used to randomly decide between two options.

A credit bureau collects and researches individual credit information and sells it to creditors for a fee, so they can make decisions about granting loans. The top three credit bureaus in the U.S. are Experian, Equifax, and TransUnion, although there are several others as well.