1 Understanding Credit and Debt Terms

What does APR stand for in the context of borrowing money?

• Annual Payment Rate

• Annual Percentage Rate

• Annual Principal Rate

• Annual Penalty Rate

Which of the following is a type of closed-end credit?

• Credit Card

• Mortgage

• Overdraft

• Line of Credit

What is the impact of declaring bankruptcy on your credit?

• It has no impact

• It has a minor positive impact

• It has a major negative impact

• It improves your credit score

What is a credit freeze?

• A method to increase your credit limit

• A security measure to prevent access to your credit report

• A way to lower your interest rates

• A type of loan with no interest

Which of the following is NOT a major credit bureau?

• Equifax

• Experian

• TransUnion

• CreditKarma

What does credit utilization refer to?

• The total amount of debt you owe

• The percentage of available credit you are using

• The number of credit accounts you have

• The interest rate on your credit card

What is a credit report?

• A summary of your monthly expenses

• A detailed report of your credit history

• A list of your bank account balances

• A report of your annual income

What is the maximum amount you can borrow on a credit card called?

• Credit Limit

• Credit Score

• Credit Balance

• Credit Inquiry

What is the term for when a creditor tries to recover a debt you haven't paid?

• Credit Inquiry

• Collection

• Credit Freeze

• Credit Utilization

What is the formula for calculating credit utilization?