Quiz 5

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

• Jake holds 2 store credit cards, a bank credit card, a car loan, and a mortgage.

• Jake has received 3 traffic tickets in the past 2 months.

• Jake has applied for 4 credit cards and a car loan in the past 6 weeks.

• Jake pays his bills consistently and on time.

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

• When a person has sufficient financial resources

• A person may not review his/her credit report

• Once a year, from each of the three main credit reporting agencies

• At any time and an unlimited number of times

Which is not an example of a data furnisher?

• LandLord

• Credit card company

• Utility company

• Medical provider

Paying the minimum payment on a credit card every month will:

• make the final amount paid substantially higher than the amount initially charged to the card.

• allow the cardholder to avoid paying any interest charges.

• help the cardholder create a plan for paying off a credit card in a decent amount of time.

• pay a large percentage of the total balance owed every month.

Sarah will turn 18 next month. She plans to apply for a credit card. Which statement is true?

• Sarah cannot obtain a credit card until she turns 21.

• Sarah can obtain a credit card by filling out an application as long as she waits until after her 18th birthday.

• Sarah can only obtain a credit card if she has a co‐signer or proof of sufficient income to make the required payments.

• Sarah will need to use a special application since she is under 25.

Which is a general rule when dealing with credit reports to minimize identity theft?

• Report mistakes to only one credit reporting agency and they will inform the others

• Keep credit reports in an easily accessible location, so information can be accessed if fraud occurs

• Wait 60 days before disputing any wrong information found in a credit report or on a credit card statement

• Check each credit report at least once per year

Which action will not make an individual vulnerable to identity theft?

• Throwing mail in the garbage

• Paying cash for a movie ticket

• Responding to an email from one’s depository institution

• Using a computer without updated spyware protection

Charis wants to decrease the risk of fraudulent use of her credit cards. Which strategy would be the most effective?

• Using credit cards for all her purchases so she only needs to pay one bill each month

• Giving account numbers over the Internet rather than over the phone

• Signing the back of her card with her signature and “Please see picture ID”

• Carrying all credit cards in her wallet so they do not get lost

David earns $5,000 per month at his accounting job. He has a student loan payment of $120, a car loan of $300. Which statement is true?

• David’s credit payments are within the safe range for someone with his income

• David’s student loan payment must be subtracted from his car loan payment to determine whether his overall credit payments are within the safe range

• David’s student loan payment is within the safe range but his car loan is not

• David’s total credit payments are higher than the recommended amount for someone earning his income

Leah is trying to explain the difference between open-end and closed-end credit to her roommate. Which should she include in her description of closed-end credit?

• Credit limits vary depending on the loan balance

• Interest rates vary depending on the repayment history

• Equal payments are required on a regular basis until the loan is repaid

• It is a continuous loan the borrower must repay with a revolving balance