Test Review Chapter 7-10

Your credit report includes your credit score.

• True
• False

Lenders are legally required to report all credit activity to the credit bureaus.

• True
• False

A high debt-to-income (DTI) ratio can make it more difficult to get approved for new credit.

• True
• False

A credit score is primarily based on an individual's income and savings.

• True
• False

The Annual Percentage Rate (APR) includes both the interest rate and additional fees associated with a loan or credit card.

• True
• False

Charge cards typically have no preset spending limit and require the full balance to be paid each billing cycle.

• True
• False

What is the range of FICO credit scores?

• 300-850
• 0-100
• 500-1000
• 1-10

Which factor has the largest impact on your credit score?

• Credit mix
• Payment history
• New credit inquiries
• Length of credit history

The primary purpose of a debt management plan (DMP) is to:

• Increase your available credit limit
• Consolidate multiple credit cards into one account
• Reduce interest rates and create structured repayment plans
• Apply for new lines of credit

Which of the following is NOT one of the "Three C's" of qualifying for credit?

• Capacity
• Capital
• Collateral
• Creditworthiness