Credit Scores as Important to Teens as SATs By the time they turn 18, about one in five high school students already has a credit card. A federal bankruptcy judge is trying to keep students out of his court in the future by teaching them about credit scores and other borrowing basics.

Credit Scores as Important to Teens as SATs

Credit Scores as Important to Teens as SATs

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By the time they turn 18, about one in five high school students already has a credit card. And they're not shy about using it. Credit card debt among young people roughly doubled during the 1990s. And so did the number of 18- to 24-year-olds filing bankruptcy.

Federal bankruptcy Judge John Hargrove got tired of seeing bankruptcy filings from such young debtors. So he's giving high school students in San Diego, Calif., a crash course in using credit wisely. Hargrove's program is called CARE, which stands for "Credit Abuse Resistance Education."

"It's not bad to have a credit card. It's just wise to know what you're doing," says bankruptcy attorney Jeffrey Schreiber, who participated in a recent CARE presentation along with Hargrove.

Below is a quiz Hargrove uses in the program.

Credit Abuse Pop Quiz

Take a quiz about buying on credit and test your consumer knowledge.

1. TRUE or FALSE: The ability to obtain a job, car and/or home loan critically depends on your credit history and score.

Answer to No. 1


2. What does FICO stand for?

a) Federal Insurance Credit Organization

b) Fair Isaac Corporation

c) Financial Income Credit Office

d) Fair Interest Consumer Organization

Answer to No. 2


3. What is a FICO score?

a) It keeps a report card of your late payments and debt.

b) It punishes consumers for going over their credit limit.

c) It's a three-digit number that determines the interest rate you will pay on your credit cards, car loans and home mortgages or whether you will be able to get a cell phone or have your application for a rental apartment accepted.

d) It offers credit cards.

Answer to No. 3


4. What is the biggest factor in determining your credit rating with lenders?

a) income level

b) home ownership

c) amount of debt

d) FICO score

Answer to No. 4


5. The average amount of time it takes to "clean up" a negative credit history is:

a) 2-3 years

b) 12 years

c) 7 years

d) 10 years

Answer to No. 5


6. TRUE or FALSE: A higher FICO score puts you in line for a lower interest rate on a loan or credit card.

Answer to No. 6


7. TRUE or FALSE: High school students are considered to be one of the "easier" targets by credit card companies because the companies know that students are uninformed and ready to spend.

Answer to No. 7


8. TRUE or FALSE: The only way to avoid credit card debt is to never use your credit card.

Answer to No. 8


9. TRUE or FALSE: You will never have to pay interest on your credit card if you pay your balance each month.

Answer to No. 9


10. Always use cash, not credit cards for:

a) emergencies, food, and movie tickets

b) food, movie tickets and anything less than $10.00

c) Internet shopping, emergencies and gas

d) gas, anything less than $50.00 and movie tickets

Answer to No. 10


11. If you charge $5,000 on a credit card at 20 percent and make the minimum monthly payment of 5 percent of the balance, how long will it take you to pay off the balance?

a) 6 months

b) 1 year

c) 7 years

d) 120 months

Answer to No. 11


12. By the end of a college student's freshman year, he/she will have accumulated an average of _________ in credit card debt alone.

a) $1,500.00

b) $500.00 - $800.00

c) $500.00

d) $50.00

Answer to No. 12


13. What will you owe if you pay your credit card balance after the due date?

a) a late penalty

b) interest on your entire balance

c) both of the above

d) neither of the above

Answer to No. 13


Source: Credit Abuse Resistance Education (CARE) Program