Question

to be sure you are establishing good credit, which of the following actions should you avoid?

a. never spend more than you have in an account.
b. take on a risky loan just to get your credit started.
c. understand loan types and carefully choose the best one for you.
d. get a department store credit card and pay it in full every month, on time.

Explanation:

Analyze the question prompt

The question asks to identify which action should be avoided to establish good credit.

Evaluate option A

"Never spend more than you have in an account." This is a responsible financial habit that prevents overdrafts and debt accumulation, so it should not be avoided.

Evaluate option B

"Take on a risky loan just to get your credit started." Taking on high-risk debt can lead to missed payments, high interest, and default, which severely damages credit. This action should be avoided.

Evaluate option C

"Understand loan types and carefully choose the best one for you." Researching and selecting appropriate financial products is a positive practice, so it should not be avoided.

Evaluate option D

"Get a department store credit card and pay it in full every month, on time." Paying balances in full and on time builds a positive payment history, which is excellent for credit, so it should not be avoided.

Answer:

• a. Never spend more than you have in an account.
• b. Take on a risky loan just to get your credit started. (Correct answer)
• c. Understand loan types and carefully choose the best one for you.
• d. Get a department store credit card and pay it in full every month, on time.