Unit 6: Credit and Loans

Which of the following credit scores is a normal credit score?

• 400

• 500

• 650

• 775

What is defaulting?

• Failing to pay debts

• Opening too many credit accounts

• Getting a low credit score

• Building a credit history

Which of the following is a part of applying for a loan?

• Verifying your income

• Negotiating an interest rate

• Signing up for a credit card

• Completing a means exam

Name at least one of the steps in establishing credit.

Evaluate responses using AI:

OFF

Which of the following is not part of the process of establishing credit?

• Opening a bank account

• Getting a credit card

• Taking out a loan

• Using a credit card regularly

What does a credit counselor do?

• Co-signs a loan with you

• Helps you make a plan to resolve financial issues

• Convinces your creditors to reduce your debt

• Collects debts

What is collateral?

• A finance charge

• A specific type of home loan

• An asset or group of assets that are linked to a loan

• A down payment

Name at least one section of a credit report.

Evaluate responses using AI:

OFF

Which of the following is a way to use credit responsibly?

• Opening several different credit accounts

• Paying only the minimum payment each month

• Understanding the account’s interest rate

• Paying attention to the APR and not the APY

What is revolving credit?

• Credit when the borrower makes regular monthly payments

• Credit that requires payment in full on a specific date

• Credit that is paid all at once, in a single payment

• Credit that lets the borrower choose how much of the credit to use and when to pay it