SSPFL5 Review

Open Ended

Why is understanding credit important for your financial health?

Multiple Choice

Which of the following best describes the relationship between creditworthiness and interest rates?

• Higher creditworthiness usually leads to lower interest rates.

• Higher creditworthiness usually leads to higher interest rates.

• Creditworthiness does not affect interest rates.

• Interest rates are only affected by the economy, not creditworthiness.

Multiple Choice

Which of the following is NOT a factor used to assess creditworthiness?

• Character assessment

• Collateral as security

• Capacity to pay

• Investment portfolio

Open Ended

Explain how a high credit score can benefit a borrower when applying for a loan.

Open Ended

Describe the role of collateral in reducing lender risk and improving loan terms.

Multiple Select

Select all the factors that are considered when assessing a borrower's capacity to pay.

• Income

• Employment history

• Debt-to-income ratio

• Credit card rewards

Multiple Choice

Which of the following is a component of a credit score?

• Payment history

• Loan approval

• Collateral value

• Employment contract

Fill in the Blank

The most important factor in a credit score, accounting for 35%, is ___.

Multiple Choice

Which of the following is NOT a common use of credit information?

• Determining loan eligibility by banks

• Screening job candidates for financial responsibility

• Evaluating rental risk by landlords

• Setting grocery store prices

Fill in the Blank

Consumers can access free credit reports annually from the three major credit ___ through an official website.

Multiple Select

Which of the following are sections typically included in a credit report?

• Personal details

• Credit accounts

• Medical history

• Public records

Open Ended

Explain why it is important to regularly check your credit report for errors and unauthorized activity.

Open Ended

Describe two responsible credit practices that can help maintain a good credit score.

Multiple Choice

What is one benefit of starting good credit habits early?

• It guarantees a high salary

• It builds a strong base for future financial opportunities

• It eliminates the need to pay bills

• It prevents all types of loans

Open Ended

Explain how responsible credit use and financial planning can help prevent bankruptcy. Provide at least two examples.

Multiple Choice

Which of the following is NOT a common cause of personal bankruptcy?

• Medical expenses

• Job loss

• Winning the lottery

• Divorce

Open Ended

How does creditworthiness affect the interest rates offered to individuals by lenders?

Open Ended

What are some key factors that influence a person's credit score and overall financial health?