Dave Ramsey Chapter 4

Which of the following is not a factor in determining a FICO score?

• Getting a personal loan from a bank

• Using credit cards

• Paying cash for all purchases

• Taking out a mortgage on a house

Which of the following is not a good idea for getting out of debt?

• A) Quit borrowing money

• B) Get a part-time job or work overtime

• C) Sell something

• D) Borrow money from your parents to pay for the debt

Which of the following things cannot be done with a debit card but can be done with a credit card?

• Go into debt

• Purchase something online

• Rent a car

• Purchase an airline ticket

What factors affect a credit score?

• Type of debt

• New debt

• Duration of debt

• All of the above

Which of the following statements is false?

• A) Prior to the FCRA, consumers were unable to challenge errors in their credit reports.

• B) Under FCRA, consumers are allowed to receive one free credit report every five years.

• C) The U.S. Congress enacted the Fair Credit Reporting Act to address concerns over consumer credit report accuracy, privacy and fairness.

• D) Under FCRA, creditors must notify consumers if they deny credit based on a credit report file, and they must also tell the consumer which of the three credit bureaus provided the report.

Which of the following is not a recommended step in the Drive Free method of purchasing a car?

• A) Plan your purchase in advance using the sinking fund method of saving.

• B) Place your savings in a mutual fund so that your money can make more money.

• C) Start with an inexpensive car and gradually move up in car value as your savings increases.

• D) Explore new car dealerships for the best interest rate.

Which of the following is the most cost-effective option for purchasing a home?

• A) Get a 15-year mortgage with a 5% down payment.

• B) Get a 30-year mortgage so that you can get the lowest possible payments.

• C) The most ideal way to buy a house is with 100% down; if that is not an option, you should get no more than a 15-year, fixed rate mortgage with a down payment of at least 10%.

• D) Get a 30-year mortgage with a 20% down payment.

Which of the following is not recommended in the debt snowball method of getting out of debt?

• A) List your debts in order from smallest to largest balance and focus on paying the smallest debt off first.

• B) Every extra dollar you get should be thrown at the largest debt first.

• C) Attack your debt with intensity.

• D) Every time you pay off a debt, you add its old minimum payment to your next debt payment