Dave Ramsey, Chapter 4 - DEBT

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

• Using credit cards

• Paying cash for all purchases

• Taking out a mortgage on a house

• Getting a personal loan from a bank

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

• Borrow money from your parents to pay for the debt

• Sell something

• Quit borrowing money

• Get a part-time job or work overtime

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

• Purchase an airline ticket

• Purchase something online

• Rent a car

• Go into debt

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

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

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

• Jake pays his bills consistently and on time

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

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

• 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

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

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

Which of the following is an act of identity theft?

• Having the same name as another person

• Receiving permission to use a parent's credit card for school clothes

• Wrongfully acquiring and using someone's personal identification

• Taking the identity of another individual as inspiration for a costume

Matt wants to guard his personal information. Which personal information is LEAST LIKELY to be used by scammers?

• Phone numbers

• Driver's license numbers

• Credit card numbers

• Bank account numbers

Which of the following actions 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 your depository institution (bank)

• Using a computer without updated spyware

What factors affect a credit score?

• Type of debt

• Duration of debt

• New debt

• All of these affect a credit score

Which of the following statements is false?

• Under FCRA, consumers are allowed to receive one free credit report every 5 years.

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

• 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 3 credit bureaus provided the report.

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