Unit 3 Quiz Credit & Debt Review

Which of the following is considered a type of unsecured debt?

• Mortgage

• Car loan

• Credit card debt

• Home equity loan

Which of the following is NOT a major credit bureau?

• Equifax

• TransUnion

• Experian

• American Express

What is the primary purpose of a mortgage?

• To finance a car purchase

• To consolidate credit card debt

• To purchase real estate

• To pay for education

Which factor has the largest impact on your credit score?

• Length of credit history

• Payment history

• Types of credit used

• New credit inquiries

What is a common characteristic of a fixed-rate mortgage?

• Interest rate changes annually

• Interest rate & payment remain the same

• Payments decrease over time

• Payments are interest-only for the first year.

If someone has bad credit or no credit, lenders may require _____________.

• A Co-Signer

• A Tax attorney

• A Home Equity Loan

• Additional insurance

What is the effect of declaring bankruptcy on your credit score?

• It has no effect.

• It improves your credit score because it wipes most debt clean.

• It significantly lowers your credit score.

• You no longer have a credit score.

Which of the following is a secured debt?

• Personal loan

• Credit card

• Auto Loan

• Medical bills

What is the role of credit bureaus?

• To lend money to consumers

• To collect and maintain credit information

• To set interest rates for loans

• To provide financial advice

Which of the following is a benefit of having a good credit score?

• Higher interest rates on loans

• Easier approval for loans and credit cards

• More frequent credit inquiries

• Increased debt limits