Credit (TRUE FACTS)

What is a credit card?

• The ace of diamonds

• A large plastic card designed to ruin consumer's finances

• A small plastic card issued by the government attached to a line of credit

• A small plastic card issued by a bank and attached to a line of credit

An amount of credit extended to a borrower is known as a...?

• Line of Extension

• Several dollars lined up in a straight line

• Available Credit

• In the finance world it is referred to as a "long nose"

Revolving credit is...

• a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time.

• a type of credit that can be used only once up to a certain limit and must be closed immediately after all payments are due

• a spinning door with money in it

• a round device that holds credit cards and spins, making it easy to shuffle through all your credit cards quickly

Which of the following is not a characteristic of an installment loan?

• repaid over time

• scheduled payments

• accompanied by an interest rate

• also known as a revolving loan

What is a credit score?

• a number between 300 and 850 representing your creditworthiness

• a statistical number that evaluates a consumer's creditworthiness and is based on credit history.

• Often referred to as a FICO score

• All of the above

What is an interest rate?

• it is your level of interest about a certain topic expressed as a percentage of your total interest

• The amount in terms of dollars that you have to pay back on a purchase

• it is the rate at which your interest in something expires. The higher the number, the quicker your interest expires

• The amount in terms of a rate or percentage that you have to pay back on an amount borrowed

What is a credit report?

• A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness

• A detailed report of a bank's credit history prepared by a credit expert and used by consumers in determining a bank's creditworthiness

• A report which shows which credit cards are better than others

• A report invented by Allan Greenspan and credited to Al Gore

The process of collecting funds that are owed and past due is called...

• gathering

• dollar collecting

• overdrafting

• collections

What are the qualities of a charge-off account

• the declaration by a creditor (usually a credit card) that an amount of debt is unlikely to be collected

• the point at which a financial institution reports poor credit performance to a credit bureau

• the point at which an account that has not been paid has a negative impact on your credit score

• all of the above

What is bankruptcy?

• A point in time where everything a person owns has been given to charity

• A legal proceeding involving a person or business that is unable to repay outstanding debts in which the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt

• When a bank is built on top of a volcano and the volcano erupts causing a bank(e)ruptcy

• A legal proceeding involving a person or business that is more than capable of repaying outstanding debts in which all of the debtor's assets are measured and evaluated, and then given away to those in need