Question

Jerome is a business major in college and is thinking about how he can establish a credit score. He has just opened his first credit card. What is the minimum he must do to generate a credit score?

A) Make one small purchase
B) Use the card frequently
C) Carry a high balance
D) Never use the credit card

Answer 1

Jerome must make at least one small purchase on his new credit card and pay the bill on time to generate a credit score. Keeping balances low and paying off the full amount each month is ideal for building good credit history and avoiding high-interest costs.

Step-by-step explanation:

To establish a credit score, the minimum Jerome must do with his first credit card is make one small purchase and ensure that he pays the credit card bill on time. This shows that he can use credit responsibly. Utilizing the card frequently, carrying a high balance, or never using the card are not necessary to generate a credit score. In fact, it's beneficial to keep the balance low and to avoid paying high amounts of interest over time. Paying the balance in full each month can help avoid these costs, while also building a good credit history. Moreover, Jerome should be aware that his credit score can be improved by not using too much of the credit available to him and by paying all bills on time.