W!SE Credit

When a person declares bankruptcy that fact will appear on the person’s credit report

• for a 3 year period.
• for a 10 year period.
• until the person repays all debts owed
• until the person is able to receive a new credit card.

To qualify for a Federal Housing Administration (FHA) loan, a person must generally

• have at least a high school diploma.
• have one-quarter of the cost of the home for a down-payment.
• fulfill income guidelines.
• provide two individuals to co-sign the loan.

What is meant by an uncollateralized loan?

• A loan not backed by a co-signer who agrees to cover the amount of the loan.

• A personal loan without assets to cover the loan amount.

• A home equity loan.

• A loan taken on a life insurance policy.

A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?

• Notify a credit reporting agency in order to avoid a late fee.
• File for bankruptcy in order to maintain ones current credit score.
• Notify the credit card companies in order to negotiate a new payment plan.
• Contact the Internal Revenue Service in order to avoid paying income tax this year

When a person brings an item to a pawnshop to obtain cash, the transaction is considered

• a collateralized loan.
• a custodial payment.
• an unsecured loan.
• a sales agreement.

Which of the following is considered to be open-end credit?

• A mortgage.
• A car loan.
• Department store charge cards.
• Installment loans.

A creditor determines your creditworthiness based on:

• Character, collateral, and capacity
• address
• gender
• education

How can you protect yourself against credit card fraud?

• Do not give personal information when applying for a credit card.
• Be extremely careful about disclosing account information to unsolicited callers
• Avoid using your credit card in department stores
• Call the credit card company to put them on alert when you are concerned

Stephanie has several open department store credit charge cards that she has not used in two years. There are no credit balances on any of the accounts. The effect these charge cards may have on her application for a loan or mortgage is:

• They are open accounts that she could use, will be considered in any application for credit, and could make it difficult for her to get a loan or mortgage
• They are sometimes closed by the department store so it they have no effect on her credit report.
• They are open accounts but they will not adversely affect her credit report because she has not used them for so long.
• They are department store credit cards that are not included on a credit report.

Ms. Jackson contacted a mortgage company about refinancing her mortgage. The mortgage company gave her a home loan with unusually high costs and without regard to her ability to repay. This practice is called:

• Redlining
• Low-income lending
• Predatory lending
• Consumer lending