Suppose that your goal is to build a credit history by establishing a FICO score. How should you approach payments on a long-term loan, such as an auto loan?

Question

(1 point)
Responses
Pay the minimum amount required each bill.

Make multiple small payments toward each bill.

Skip payments occasionally.

Pay as much as you can afford each bill.

Answer 1

To build a credit history and establish a FICO score, the best approach for payments on a long-term loan, such as an auto loan, would be to pay as much as you can afford each bill. This approach demonstrates responsible financial management and helps reduce the principal balance faster, potentially lowering the overall interest paid and positively impacting your credit score.