Chapter 4 Review

Something that credit card commercials don't show you is . . .

• A. People making payments for months or years on those credit card purchases

• B. How much your credit score will grow right away

• C. How happy your parents will be that they don't have to lend you cash anymore

• D. How great your life will be with payments

When a homeowner takes out a home equity line of credit (HELOC), that loan can only be used for home repairs and renovations.

• True

• False

Banks and lenders use credit scores to determine . . .

• A. The likelihood that someone is able to repay debt

• B. A person's financial responsibility

• C. How much collateral someone has available to put up for a loan

• D. How successful someone is

What group of people pays the highest amount of interest?

• A. Young people

• B. Rich People

• C. Old People

• D. College Grads

When you finance a new car, you will end up paying more than the sticker price.

• True

• False

While it may not always appear so, the majority of Americans live paycheck to paycheck.

• False
• True

What is your greatest wealth-building tool?

• Income

• Taxes

• Expenses

• Credit score

What kind of loan requires collateral?

• Secured loan
• Payday loan
• Unsecured loan
• Personal loan

Which of the following is part of the formula that determines a person's FICO score?

• yearly income

• Their history of payments made to lenders

• retirement accuont balance

• Total asset value

There are certain things, like renting a car or booking a hotel room, that you cannot do without having a credit card.

• True

• False