Financial Literacy Final Exam Review

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What are the two most important factors in calculating your credit score?

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Payment history and total debt

Front

Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT…

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Applying for another credit card to use in case she runs out of cash paying off her debt

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How can your credit score impact your financial well-being?

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Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be.

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Frank and Jasmere are each shopping for a new car for themselves. Each will need a $20,000 loan that they will pay back over a five year period. Frank has a credit score of 730 and Jasmere has a score of 600. Which of the following statements is TRUE?

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Jasmere's monthly payment on the loan will be about $100 more than Frank's payment.

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Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time? Options: Paying your bills on-time, Paying down balances on your credit card accounts, Decreasing your utilization of credit, Applying for multiple credit cards

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Applying for multiple credit cards

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Which of these represents a potential consequence of neglecting to pay your federal student loans? Options: Wages or tax refunds can be garnished, Passport revocation, Driver’s license suspension, Termination from your job

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Wages or tax refunds can be garnished

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What benefits do you receive by taking out a loan with a cosigner?

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You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit.

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Review this partial credit report, and then choose the response below that accurately depicts the information on the report.

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This borrower was 30 days late on their May 2015 payment

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All of the following would show up on a credit report, EXCEPT... Salary of your current job, Payment history of your car loan, Credit card payment history, Student loan activity

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Salary of your current job

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Which of the following statements comparing credit and debit cards is TRUE? Options: Far more businesses accept credit cards than debit cards, Credit cards pull money directly from your bank account, while debit cards get their money from Visa and Mastercard, Credit card companies provide you with a monthly statement, while debit cards do not, With debit cards, you are spending your own money, but with credit cards you're getting a loan that you need to pay back later

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With debit cards, you are spending your own money, but with credit cards you're getting a loan that you need to pay back later