Unit 5 Managing Credit Test

What percentage of your credit score is based on the amounts owed to each creditor individually and in total?

• 10%

• 15%

• 30%

• 35%

What is the Annual Percentage Rate (APR)?

• The cost you pay each month to borrow money

• The cost you pay each year to borrow money

• The cost you pay each week to borrow money

• The cost you pay each day to borrow money

What is an Authorized User?

• A person who is legally responsible for paying the credit card bill

• A person who has permission to use and carry another person's credit card

• A person who has permission to use and carry their own credit card

• A person who is not allowed to use any credit card

What is Bankruptcy?

• A legal proceeding to allow individuals or businesses freedom from their debts

• A legal proceeding to force individuals or businesses to pay their debts

• A legal proceeding to allow individuals or businesses to borrow more money

• A legal proceeding to allow individuals or businesses to avoid paying taxes

What is a Charge-Off?

• A declaration by a creditor that an amount of debt is unlikely to be collected

• A declaration by a creditor that an amount of debt must be paid immediately

• A declaration by a creditor that an amount of debt has been forgiven

• A declaration by a creditor that an amount of debt is overdue

What is Collections?

• An attempted recovery of a past-due credit obligation or debt

• An attempted recovery of a current credit obligation or debt

• An attempted recovery of a future credit obligation or debt

• An attempted recovery of a credit obligation or debt that has been paid

What is Credit?

• An agreement in which a borrower receives something of value now and agrees to repay the lender in the future

• An agreement in which a borrower receives something of value now and does not have to repay the lender

• An agreement in which a borrower receives something of value in the future and agrees to repay the lender now

• An agreement in which a borrower receives something of value in the future and does not have to repay the lender

What is a Credit Bureau?

• A consumer-reporting company that collects and sells information about how individual people manage their credit

• A consumer-reporting company that collects and sells information about how businesses manage their credit

• A government agency that collects and sells information about how individual people manage their credit

• A government agency that collects and sells information about how businesses manage their credit

What is a Credit Score?

• A credit score is a numerical representation of an individual's creditworthiness.

• A credit score is a measure of how much money a person has in their bank account.

• A credit score is a rating given to individuals based on their social media activity.

• A credit score is a measure of how many credit cards a person owns.

What is a Credit Limit?

• The credit limit is the maximum amount of credit that a borrower can access.

• The credit limit is the minimum amount of credit that a borrower can access.

• The credit limit is the average amount of credit that a borrower can access.

• The credit limit is the interest rate charged on a loan.