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Financial Knowledge Assessment: Q14A

14. True or False:  Paying off your credit card immediately after you make a purchase is the best way to accrue credit, and establish credit history.

  • True.
  • False.

Explanation:  The correct answer is “False.”  Paying the purchase off immediately could mean that the transaction was never recorded as a part of your history and thus does not become a part of the information that goes to the credit bureaus that is used in determining your credit score.  Instead, you should wait until your statement balance comes out, and pay the statement balance in full.  The important thing to remember is that the credit bureaus generate credit scores, and will not consider information that never makes it to them.  The best practice remains, as it states in the answer to Question 3, is to pay off the entire balance of your credit card when it becomes due, which is normally the end of the month.

Continue to Question 15