Credit & Debt: Checkpoint 3

Covers credit reports, falling behind on payments, and the risks of co-signing.

Five questions on protecting your credit and understanding the real risks of debt problems and co-signing.

Question 1 of 5 A 'hard inquiry' on your credit report happens when:

You check your own credit report You formally apply for new credit and a lender checks your report A bank sends you a pre-approval offer Your credit score updates monthly

Question 2 of 5 Checking your own credit report:

Always lowers your credit score Is a soft inquiry and does not affect your score Requires a lender's approval Can only be done once per year

Question 3 of 5 The best time to contact a lender about a payment you're going to miss is:

After it goes to a collection agency Before or as soon as you know it will be missed Only if it's more than 6 months late Never - it's better to avoid the lender

Question 4 of 5 A 'charge-off' means:

The debt is completely erased and no longer owed A lender's accounting decision that the debt is unlikely to be collected - you still owe it The debt has been paid in full Only applies to federal loans

Question 5 of 5 If you co-sign a loan for someone else, you are:

Just a reference with no real obligation Equally responsible for repaying the full loan if they don't Only responsible for half the balance Protected from any credit impact

← Back to Co-signing: The Risk You're Taking On For Someone Else Next lesson → Bankruptcy: What It Is and Isn't

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