Question

Old Doc White advised you to do your homework before applying for a consumer loan. Which of the following is his main piece of advice on preparing to get a consumer​ loan?

A. Build a monthly budget that includes the loan​ payment, but​ there's no need to include any of the associated costs​ (insurance, maintenance,​ etc.) in your budget because they are too hard to estimate.
B. Take the shortest loan term​ (number of​ years) possible so that you are out of debt faster
C. Check your credit history at least​ 3-6 months before applying for the loan.
D. Apply for a loan at 3 separate banks to ensure that you will have enough money to make the purchase​ (The Babe Ruth​ Rule).

Answer 1

C) Check your credit history at least​ 3-6 months before applying for the loan.

Step-by-step explanation:

Financial advisors will always tell us that we need to have at least 700 points in our credit score. That way when we apply for a loan we will get lower interest rates and longer terms.

If your are planning to buy a house or a car and you know you will need a big loan, you should review your credit score a few months before applying for the loan since there is a simple way you can increase your credit score. The simplest way to increase your credit score is to apply for several credit cards within a 3 to 4 month period. It doesn't matter if the credit card applications are accepted or not, your credit score will increase because number of inquiries on your credit history increased.