Finance- Credit Test

What is a credit score?

• Your credit history simplified into a single number

• A report that includes your financial history from loans to credit cards

• Includes both personal and financial information

What is credit?

• When you open up a checking or savings account at your local bank

• An investment such as company stock

• When goods, services, and/or money are received in exchange for a promise to pay back at a future date.

Which of the following is an ADVANTAGE of having "good" credit?

• You are more likely to be approved for a loan

• You won't have to pay back loans or credit cards

• Your cost of borrowing will rise

• You can pay cash for more transactions

What type of credit is a credit card?

• Single-Payment
• Debit Card

• Revolving Credit

Getting and using a credit card responsibly is one way to build credit. What is another good way to build credit?

• Get a loan and pay it off making on time payments

• Only use cash
• Use checks everywhere
• Make no more than the minimum monthly payment on you credit card bill

The bank uses a _____ to pull a report on how prospective borrowers repaid their past debts.

• customer profile

• loan agreement

• credit reporting agency

• budget

Three kinds of data that the Credit Reporting Agencies collect include:

• a person's "Personal" history including employment

• a person's "Repayment" history

• a person's "Length of Credit" history

• a person's "Medical" history

What is a credit card?

• A Debit Card

• A plastic card designed to provide unlimited credit

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

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

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

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