55% of Americans in a recent Bankrate survey erroneously believed that this is is TRUE.  Of course, the answer is “No” and those answering “Yes” are making a costly decision by paying finance charges to credit card companies.  See how your students do against the survey participants by asking them a few of the questions from the survey:

• Does having accounts with high balances help a credit score so long as those accounts are paid on time?
  • 51% wrongly believed the answer to this question was “Yes”
• Can closing accounts you no longer use hurt your credit score?
  • Only 1 in 4 surveyed was able to correctly identify that closing accounts could hurt your score.
• Will having an unpaid collection account hurt your credit score?
  • 81% understood that collection accounts do hurt your credit score
• Will a short credit history help or hurt your credit score?
  • 54% recognized that this could hurt your score

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Check out the NGPF Activity on Calculating FICO Scores

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.