International Baccalaureate (IB) Practice Exam

Which consumer action is not typically related to maintaining good credit?

1. Timely paying of bills.

2. Accumulating debt without a repayment plan.

3. Monitoring credit reports for errors.

4. Keeping credit utilization low.

The correct answer is: Accumulating debt without a repayment plan.

Accumulating debt without a repayment plan is the action that is not typically associated with maintaining good credit. Maintaining good credit largely depends on responsible management of one's financial obligations, and this includes ensuring that debts are managed effectively. Timely paying of bills is a crucial aspect of good credit behavior; it ensures that credit accounts remain in good standing and helps build a positive payment history. Monitoring credit reports for errors is also essential because identifying and correcting inaccuracies can positively affect one's credit score. Keeping credit utilization low is another key strategy; it indicates to lenders that a consumer is not overly reliant on credit and is likely to manage debt responsibly. In contrast, accumulating debt without a repayment plan can lead to missed payments, higher credit utilization ratios, and ultimately, a negative impact on one’s credit score. Therefore, this action is counterproductive to good credit management.