Finance Unit 2 Assessment

What information do credit reference agencies record?

• Employment history

• Borrowing and repayment history

• Spending habits

• Monthly income

Which of the following is NOT one of the major credit reference agencies in the UK?

• Experian

• Equifax

• TransUnion

• Paypal

What is a County Court Judgment (CCJ)?

• A court order for paying taxes

• A judgment against someone for non-payment of debts

• A credit score evaluation

• A penalty for overspending

Why should loan applications be made one at a time?

• To avoid extra fees

• To prevent looking financially distressed

• To increase credit score immediately

• To reduce credit limits

What does being on the electoral roll prove?

• A person's credit score

• A person's address

• A person's income level

• A person's spending habits

What is the term for when debt carries over to the next month, reducing income before it is earned?

• Loan rollover

• Debt spiral

• Financial distress

• Income garnishment

What is one potential consequence of a poor credit rating when applying for a loan?

• Receiving the lowest interest rate available

• Being denied access to a mortgage

• Automatically qualifying for emergency credit

• Obtaining free credit counseling

How can someone rebuild their credit history after becoming solvent again?

• By making multiple loan applications at once

• By limiting their borrowing to what they can repay

• By avoiding all types of credit completely

• By switching credit reference agencies

What is the maximum amount you can borrow for tuition fees in the UK for most universities?

• £8,000

• £9,250

• £12,000

• £6,500

How are the interest rates on student loans in the UK determined?

• Fixed rate, set when you take the loan

• Based on inflation

• Set by your university

• Determined by the government based on a flat rate