Credit, Debt, and Loans

Which of these is the best definition of credit?

• An amount of money owed by one person or party to another person or party

• A financial tool that allows people access to money that they do not currently have

• A fee that a lender charges a borrower for the service of borrowing money

• A grant or payment in support of an education that you do not have to pay back

Which of these types of loans are generally considered to use predatory lending tactics/strategies?

• Installment loans

• Payday Loans

• Promissory Notes

• Secured Loans

What does a credit score mainly show to lenders?

• How many credit cards I have open

• My overall creditworthiness (how reliable or trustworthy I am with credit)

• How many years I have had my credit card

• Which types of loans I take out most often

What is the typical relationship between the riskiness of a loan and that loan's interest rate?

• The lower the risk for the lender, the higher your interest rate will be

• The higher the risk for the lender, the higher your interest rate will be

• The higher the risk for the lender, the less likely it will be that you will pay interest

• There is no relationship between the two

Which is considered riskier for a lender, a secured loan or an unsecured loan?

• Secured Loan

• Unsecured Loan

Which of the following MAY request a credit score check?

• Landlord or landlady

• Mortgage or auto loan officer

• Certain employers

• All of these

Which of these is the most heavily weighted (most important) part of a credit score?

• Amounts owed

• Payment history

• Mix of credit types

• Length of credit history

When talking about credit cards, your "line of credit" is:

• The number of cards you have open at a given time

• The amount of money your bank/credit union is willing to lend you over a set period of time (such as a month)

• The minimum payment required on a credit card statement

• The number you call if your credit card is stolen

Which of these types of loans will never require collateral?

• Installment Loan

• Secured Loan

• Promissory Note

• Unsecured Loan

What is the best definition of collateral?

• An item of value used to secure a loan

• The amount of money your bank is willing to lend you over a set period of time

• Another term for a missed credit card payment

• How often I make my credit card payments on time, and in full