Credit Assessment Factors Quiz

What are the three main factors banks consider when deciding who and how much credit to give?

• Character, Capacity, Collateral

• Employment, Education, Experience

What do banks use to determine how much credit to extend and under what terms?

• History of repayment and bank account behavior

• Amount of current savings

What is a consequence of missed or late payments on loans and credit cards?

• Lower interest rates

• Higher interest rates or lower credit limit

How do banks assess a borrower's ability to repay new debt?

• By checking their credit score only.

• By assessing income level and calculating the debt to income (DTI) ratio.

What economic conditions do banks assess to determine borrowers' creditworthiness?

• Interest rates, inflation, and employment trends

• Technological advancements and innovation

Which of the following is a credit reporting agency?

• Equifax

• Credit Karma

What is the purpose of a credit score?

• To measure your income

• To evaluate your financial character

What do credit reports track?

• Your financial history

• Your educational history

Who is responsible for correcting errors in a credit report?

• The credit reporting agency

• You

What does the Fair and Accurate Credit Transaction Act allow you to receive each year?

• One free report from each bureau

• Unlimited free reports from each bureau