PF 6.01-6.03

Becky no longer wants to use her Clothes-R-Us credit card. What is the best thing she can do with the credit card?

• File the credit card away for use at a later time.
• Let a family member take over the credit account so her credit score will not be affected.
• Keep the credit card in her wallet in case she needs proof of identification.
• Close the account by phone and in writing then destroy the card.

Which of the following is not included in an individual's credit report?

• Current and past addresses
• Account balances
• Bankruptcies and foreclosures
• Medical Information

When Bryce attempted to borrow money at the bank, he learned that his credit score is low. Which statement best describes what this is likely to mean for Bryce?

• The interest rates on his loan will be lower since his credit score is low.
• The purchase price of the item he needs the loan for will be higher due to his low credit score.
• The monthly loan payments will be lower due to his lower credit score.
• The interest rates on his loan will be higher since his credit score is low.

Jake's credit application has been declined because of his negative credit history. Which statement is most likely to be true?

• Jake pays his bills consistently and on time.
• Jake has applied for four credit cards and a car loan in the past six weeks.
• Jake received three traffic tickets in the past two months.
• Jake holds two store credit cards, a bank credit card, a car loan, and a mortgage.

Jenny is 18 years old and has applied for credit for the first time. Her credit application was declined because she has no credit history. What would you recommend Jenny do to build a positive credit history?

• Jenny should acquire several credit cards to establish that she can manage them responsibly.
• Jenny should obtain a secured credit card.
• Jenny should re-apply for the same credit but include a letter of recommendation from someone who knows her well and can vouch for her character.
• Jenny should apply for a different type of credit. Since she was applying for a bank loan she should apply for a credit card.

When may a person view his/her credit report for free?

• At any time and an unlimited number of times.
• Once a year from each of the three main credit reporting agencies.
• A person may not review his/her credit report.
• If a person has sufficient financial resources.

Which is not an example of a data furnisher?

• Landlord
• Credit Card Company
• Utility Company
• Medical Provider

Edward wants to develop a positive credit history. How should he do this?

• Maintain reasonable amounts of available credit.
• Have one type of credit account.
• Pay cash for the majority of purchases.
• Open credit accounts in his parents' name.

To answer the essay test question about the meaning of open-end credit, Ryan should include which statement?

• A down payment must be made before receiving a loan.
• Individuals are allowed to borrow an unlimited amount of money as long as they pay it back.
• Credit is extended in advance so the borrower does not have to apply for credit each time credit is desired. 
• Payments are equal and required to be paid on a regular basis.

Evan is writing a scholarship essay about the importance of responsible money management. He wants to explain the meaning of borrowing. Which statement below would explain the importance of understanding the process of borrowing money?

• When you are borrowing you are spending future income.
• Borrowing is an important part of a responsible financial plan.
• Borrowing strongly affects the present self but has less impact on the future self.
• Borrowing builds a strong credit history because it requires individuals to file a credit report.