Q1/Q2 Review

Front

What is the principal amount in a loan?

Back

The original amount of money borrowed

Front

What does interest represent in a loan?

Back

The cost of borrowing money

Front

Which of the following is a benefit of using credit? It eliminates the need to save money, It allows you to make purchases without cash, It guarantees lower prices on goods, It increases your monthly expenses

Back

It allows you to make purchases without cash

Front

What is a credit score?

Back

A numerical representation of your creditworthiness.

Front

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

Back

Payment history

Front

How is the interest rate usually expressed?

Back

As a percentage of the principal

Front

What is considered a "Good" credit score range? Options: 300-499, 500-600, 661-780, 781-850

Back

781-850

Front

Why is building a credit history important?

Back

It is essential for obtaining loans and financial products.

Front

Which of the following is NOT a factor in calculating your credit score? Payment history, Amounts owed, Length of credit history, Monthly income

Back

Monthly income

Front

What does APR stand for?

Back

Annual Percentage Rate