Understanding Credit and Loans

Front

Why do people typically borrow money?

Back

To fund major purchases, like education or a home

Front

Which of the following is NOT a source of credit? Banks, Credit unions, Retail stores, Utility companies

Back

Utility companies

Front

What is a key difference between federal student loans and private student loans?

Back

Federal loans offer flexible repayment plans.

Front

Which of the following credit products is typically used to purchase a car? Credit card, Personal loan, Car loan, Mortgage

Back

Car loan

Front

What is the primary characteristic of a payday loan?

Back

High-interest rates

Front

What is the difference between fixed and variable interest rates?

Back

Fixed rates remain the same; variable rates fluctuate based on market conditions.

Front

What does a credit report contain?

Back

Detailed history of a borrower’s financial behavior

Front

How often are individuals entitled to a free credit report?

Back

Annually

Front

What is a credit score primarily used for?

Back

To measure your creditworthiness

Front

Which factor has the greatest impact on your credit score? Options: Types of credit, Length of credit history, Payment history, New credit

Back

Payment history