Personal Finance Unit 6 Review

What is defaulting?

• Getting a low credit score.

• Opening too many credit accounts.

• Failing to pay debts.

• Building a credit history.

What is revolving credit?

• Credit that requires payment in full on a specific date.

• Credit that lets the borrower choose how much of the credit to use and when to pay it.

• Credit when the borrower makes regular monthly payments.

• Credit that is paid all at once in a single payment.

Which of the following is NOT a part of the process of establishing credit?

• Opening a bank account.

• Getting a credit card.

• Taking out a loan.

• Using a credit card regularly.

What is financing?

• Paying back debts.

• Reducing the principal of a loan.

• Using credit to pay for purchases.

• Using a debit card to make purchases.

What is collateral?

• A down payment.

• A finance charge.

• A specific type of home loan.

• An asset or group of assets that are linked to a loan.

Which of the following are NOT a part of your credit report?

• The address of your current house or apartment,

• The number of times you have filed for bankruptcy.

• The number of inquiries banks make about your credit.

• The balance in your bank account.

What might you do if you are unable to get a credit card?

• Stop accepting government assistance.

• Make as many cash purchases as possible.

• Apply for a department store card.

• Pay less attention to your bank balance.

What is co-signing?

• Requesting multiple credit histories.

• Sharing responsibility for a debt with another person.

• Opening two lines of credit at the same time.

• Allowing someone else to be completely responsible for your debt.

What does a credit counselor do?

• Collect debts.

• Convinces your creditors to reduce your debt.

• Helps you make a plan to resolve financial issues.

• Co-signs a loan with you.

What is a means exam?

• A document stating you don't need to pay certain debts.

• A plan for paying your creditors.

• A survey about your income, expenses, and assets.

• An application for a loan.