Test: Unit 1 Credit Scores + Financial Literacy Introduction

Front

What is risk-based financing?

Back

Risk-based financing is a way that lenders determine your interest rate for a loan.

Front

What is a poor financial decision among the following options? Reducing spending by canceling some of her streaming subscriptions, Taking extra shifts at work to increase her income, Making more than the minimum required payment on her debt, Applying for another credit card to use in case she runs out of cash paying off her debt

Back

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

Front

What is the most relevant factor in determining your credit score? Options: Salary of your current job, Payment history of your car loan, Credit card payment history, Student loan activity

Back

Salary of your current job

Front

What is the best action to improve credit score? Options: Cancel his credit cards, Get a car loan, Check his credit score

Back

Make on-time payments

Front

What is the best financial practice when making purchases at a store?

Back

Always pay with a credit card instead of a debit card at a store.

Front

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

Back

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

Front

Who are the credit reporting agencies?

Back

Credit reporting agencies (Equifax, Experian and TransUnion)

Front

What should you do if you suspect identity theft? Options: Contact the credit card company to have them fix it, Contact the credit reporting agency, Wait a few weeks to see if it gets resolved, Call the police to report the possible identity theft

Back

Contact the credit reporting agency

Front

What is necessary to rent your first apartment, finance your first car, or open an unsecured credit card?

Back

You will need a credit history.

Front

What can your credit score determine?

Back

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