Understanding Credit and Loans

Front

What is credit?

Back

A financial tool to borrow money with a promise to pay later.

Front

Which of the following is NOT a source of credit? Banks and credit unions, Finance companies, Grocery stores, Government agencies

Back

Grocery stores

Front

What is the primary benefit of having a good credit score?

Back

Access to more credit opportunities

Front

What does the 'Character' in the Five C's of Credit refer to?

Back

Your integrity and reliability

Front

Which factor has the largest impact on your FICO credit score? Options: Credit mix, New credit, Payment history, Length of credit history

Back

Payment history

Front

What is a disadvantage of using credit cards?

Back

High interest rates

Front

What should you do to improve your credit score? Options: Max out your credit cards, Pay bills on time, Apply for multiple credit cards, Close unused credit accounts

Back

Pay bills on time

Front

Which type of interest rate remains the same throughout the loan term? Variable rate, Fixed rate, Incremental rate, Adjustable rate

Back

Fixed rate

Front

What does the Truth in Lending Act require lenders to do?

Back

Disclose loan terms clearly

Front

How often can you get a free credit report from each major agency?

Back

Annually