Credit Score Pop Quiz: How Much Do You Really Know?

If you've been checking in with the Nerds frequently, you're probably feeling pretty good about your credit IQ. After all, we're in the business of helping you keep your score in sterling condition.

But what if you had to put your credit smarts to the test? To see how much you really know, take our true-or-false pop quiz. Be sure to report your score in the comments section -- we look forward to hearing from you!

1. You have to get a credit card to establish a credit history.

False . You don't absolutely have to get a credit card. As long as you have other open credit accounts -- like an auto loan or a student loan, for instance -- you're on the road to creating a credit history.

But keep in mind that opening a credit card and using it responsibly is an easy way to establish a good score. Even though you don't have to resort to plastic, you might want to consider it.

2. You can open as many credit cards as you want without damaging your credit.

True. It's a common myth that having too many credit cards or too much available credit will hurt your credit, but neither of these variables is factored into you score.

For simplicity's sake, you might want to limit the number of credit cards you keep on hand; this makes it easier to avoid mistakes like late payments or getting into debt. But strictly speaking, you don't have to limit your number of open accounts for the sake of your score.

3. You should avoid checking your credit score, because every time you do you'll lose points.

False . It's true that a hard credit inquiry -- which occurs when a bank checks your credit to decide whether to lend to you -- will ding your credit slightly. But if you shop for a loan within a short timeframe, the major credit bureaus will count your several hard inquires as only one. This will make it easy to bounce back from the few points you'll lose when you apply for credit.

But soft inquiries -- like when you pull your own credit report -- don't have any impact on your credit score. Feel free to check your own credit anytime.

4. Maxing out your credit card could seriously hurt your score.

True. Maxing out your credit card could do real damage, because 30% of your score is determined by your credit utilization ratio. Using more than 30% of your available credit at any time is potentially hazardous.

It's important to note that this is true even if you pay off your card at the end of the month. Credit bureaus sometimes collect information on your accounts mid-cycle, so keeping your utilization on your cards below 30% at all times is important.

5. Striving for a perfect credit score is a waste of time.

True . You might be surprised to know that perfection is overrated -- at least when it comes to your credit. As long as your score reaches a certain threshold -- about 720 for most lenders -- you're going to qualify for the best rates and cards. There's no real benefit to striving for the elusive 850.

6. Paying a bill late every once in a while is no big deal.

False . Paying bills late is a really big deal. The largest portion of your credit score -- 35% -- is determined by your history with paying your bills on time. Make it your No. 1 financial priority to get your bills in on time. This habit alone could save you from some serious credit score woes.

7. Credit reports rarely contain errors.

False . A 2013 report by the Federal Trade Commission found that 20% of Americans' credit reports contained errors. Some of these mistakes were serious enough to interfere with consumers' ability to get a loan.

This is why it's essential to pull your credit report at least once per year to check it for errors. If you spot one, immediately take steps to have it corrected.

The bottom line: Knowing as much as you can about your credit score will help you keep it in good shape. No matter how you did on our quiz, be sure to keep visiting the Nerds regularly -- we're always here to keep you informed!

Your credit card may soon be completely worthless

The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here Click here to watch this stunning video.

Try any of our Foolish newsletter services free for 30 days . We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.