What’s Your Credit Risk Tolerance?


We’ve talked about investments and risk tolerance, but what about consumer credit? Too many people jump into debt before considering what their budget can handle. Discover your credit risk tolerance by taking the quiz below. What you learn will help you make better financial decisions.

1. How many credit cards do you currently have?

a. 0-2

b. 3-5

c. More than 5

2. I feel comfortable using my credit card for small items like gum or bottled water.

a. True

b. False

3. My current credit score is:

a. Over 740

b. 700-740

c. Under 700

d. Under 650

e. I don’t know

4. When it comes to credit card balances:

a. I pay them off at the end of every month.

b. I’ll pay the minimum amount during a zero-interest grace period.

c. They’re part of life. I can’t seem to pay them off entirely.

5. How many inquiries do you have on your credit reports?

a. None

b. 1

c. 2

d. 3

e. I don’t know

6. If I had to, I could afford to pay off all my consumer debt today.

a. True

b. False

7. Do you have cosigners on any of your credit accounts?

a. No.

b. My parents cosigned for my first card.

c. Nearly all of them.

8. Do the math: What’s your total credit balance?

a. Less than 25 percent of my credit limit.

b. More than 25 percent of my credit limit.

c. I’m afraid to look at my calculator.

9. You need credit to cover basic monthly expenses like rent, utilities and food.

a. True

b. False

10. Be honest: Why do you have credit accounts?

a. To build a positive credit score.

b. To buy items I can’t afford.

c. A little of both.



1) a-0, b-2, c-4; 2) a-2, b-0; 3) a-0, b-1, c-2, d-3; 4) a-0, b-2, c-3; 5) a-1, b-1, c-2, d-3, e-4; 6) a-0, b-2; 7) a-0, b-1, c-3; 8) a-0, b-2, c-4; 9) a-4, b-0; 10) a-0, b-3, c-2


Conscientious Consumer (0-12 points)

Credit is a powerful tool in your arsenal, one that you’ve honed and mastered. You’ve done your research and understand how credit can hurt or help you depending on its uses. That’s why you’re likely to pay off monthly balances and avoid unnecessary expenses. Keep up the good work.

Ambivalent Applicant (13-23 points)

Credit is something you have, but it’s not something you fully understand. Sure, you’ll apply for a new line of credit, but you fail to realize how and why it affects your overall credit score. It could be worse, you think, but it could also be a lot better. Consider doing some research before credit balances overtake your life. It’s never too late to put yourself on the right path.

Credit-Crazed (24-32 points)

Risk is your middle name when it comes to credit. You’re probably a fan of charging small items, paying the minimum balance and generally ignoring the finer points of personal finance. You like to spend, and you aren’t too concerned with the consequences. It’s time for a wake-up call. Talk to a professional about the status of your credit score and how to change your spendthrift ways.