Managing Credit - #2

What is the annual percentage rate (APR)?

• The total amount of interest paid over a loan's lifetime

• The yearly cost of borrowing including fees and interest

• The monthly payment on a credit card

• The rate at which credit scores increase annually

A credit bureau is best described as:

• A government agency that regulates banks

• A financial advisor who helps with debt

• A company that collects and maintains credit information

• A department within a bank that approves loans

The FICO score is:

• A measurement of your savings rate

• A type of investment portfolio

• A standardized credit scoring model

• A tax identification number

What is credit utilization rate?

• The ratio of credit used to credit available

• The speed at which you pay off debt

• The number of credit cards you own

• The interest rate on your credit card

The debt snowball method involves:

• Consolidating all debts into one payment

• Paying off smallest debts first while maintaining minimum payments on others

• Paying off highest interest debts first

• Declaring bankruptcy to eliminate debt

What is a hard inquiry?

• A detailed investigation by the IRS

• A routine credit check by an employer

• A credit check that can affect your credit score

• A request for a loan from a bank

The Consumer Financial Protection Bureau (CFPB) is:

• A federal agency that protects consumers in financial markets

• A private company that monitors credit scores

• A bank-operated consumer advocacy group

• A credit counseling service

Repossession refers to:

• Taking ownership of a new property

• Refinancing a loan

• A lender taking back property used as collateral

• Transferring property to another owner

An authorized user is someone who:

• Has their own separate credit account

• Works for a credit card company

• Has permission to use someone else's credit card

• Manages multiple credit accounts

Chapter 13 Bankruptcy is characterized by:

• Complete liquidation of assets

• A court-supervised repayment plan

• Immediate debt forgiveness

• Corporate restructuring