Chapter 4 PFL - Debt Quiz

Which of the following is a sign that your identity may have been stolen?

• call from a collection agency about a debt you didn’t incur

• Bank and billing statements don’t arrive on time

• Your credit report shows accounts you didn’t open

• All of the above

Which of the following is not a recommended step in the Drive Free method of purchasing a car?

• Plan your purchase in advance using the sinking fund method of saving.

• Place your savings in a mutual fund so that your money can make more money.

• Start with an inexpensive car and gradually move up in car value as your savings increases.

• Explore new car dealerships for the best interest rate.

Co-signing a loan is a good way to help a friend or relative.

• True

• False

If you are a victim of identity theft, you are only responsible for paying back half of the debt.

• True

• False

If you do not have a FICO score, what factors will determine whether or not you qualify for a mortgage?

• History of rental and utility payments

• Spending history

• You cannot get a mortgage without a credit history

• None of the above

Teens are a huge target of credit card companies today.

• True

• False

What factors affect a credit score?

• Type of debt

• New debt

• Duration of debt

• All of the above

An interest rate charged to a customer during the early stages of a loan; the rate often goes up after a specified period of time.

• Introductory rate

• New customer fee

A decrease or loss in value.

• Inflation

• Depreciation

When a person owes more on an item (like a car or house) than it is worth, the person is said to be ______________ on the loan.

• Secured

• Upside down