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W!SE Credit

Total questions: 49

Worksheet time: 49mins

Name
Class
Date
1.
When a person declares bankruptcy that fact will appear on the person’s credit report
a)
for a 3 year period.
b)
for a 10 year period.
c)
until the person repays all debts owed
d)
until the person is able to receive a new credit card.
2.
To qualify for a Federal Housing Administration (FHA) loan, a person must generally
a)
have at least a high school diploma.
b)
have one-quarter of the cost of the home for a down-payment.
c)
fulfill income guidelines.
d)
provide two individuals to co-sign the loan.
3.

What is meant by an uncollateralized loan?

a)

A loan not backed by a co-signer who agrees to cover the amount of the loan.

b)

A personal loan without assets to cover the loan amount.

c)

A home equity loan.

d)

A loan taken on a life insurance policy.

4.
A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?
a)
Notify a credit reporting agency in order to avoid a late fee.
b)
File for bankruptcy in order to maintain ones current credit score.
c)
Notify the credit card companies in order to negotiate a new payment plan.
d)
Contact the Internal Revenue Service in order to avoid paying income tax this year
5.
When a person brings an item to a pawnshop to obtain cash, the transaction is considered
a)
a collateralized loan.
b)
a custodial payment.
c)
an unsecured loan.
d)
a sales agreement.
6.
Which of the following is considered to be open-end credit?
a)
A mortgage.
b)
A car loan.
c)
Department store charge cards.
d)
Installment loans.
7.
A creditor determines your creditworthiness based on:
a)
Character, collateral, and capacity
b)
address
c)
gender
d)
education
8.
How can you protect yourself against credit card fraud?
a)
Do not give personal information when applying for a credit card.
b)
Be extremely careful about disclosing account information to unsolicited callers
c)
Avoid using your credit card in department stores
d)
Call the credit card company to put them on alert when you are concerned
9.
Stephanie has several open department store credit charge cards that she has not used in two years. There are no credit balances on any of the accounts. The effect these charge cards may have on her application for a loan or mortgage is:
a)
They are open accounts that she could use, will be considered in any application for credit, and could make it difficult for her to get a loan or mortgage
b)
They are sometimes closed by the department store so it they have no effect on her credit report.
c)
They are open accounts but they will not adversely affect her credit report because she has not used them for so long.
d)
They are department store credit cards that are not included on a credit report.
10.
Ms. Jackson contacted a mortgage company about refinancing her mortgage. The mortgage company gave her a home loan with unusually high costs and without regard to her ability to repay. This practice is called:
a)
Redlining
b)
Low-income lending
c)
Predatory lending
d)
Consumer lending
11.
Consumers who file for bankruptcy are still responsible for:
a)
Mortgage loans
b)
credit card balances
c)
tax claims and student loans
d)
car loans
12.
Approximately, what is the annual finance charge for each $100 owed on a credit card with a 16% annual interest rate (APR)?
a)
0.84
b)
1.6
c)
8.4
d)
16.0
13.
Dawn graduated from high school and wants to get a credit card.  How can Dawn establish credit-worthiness?
a)
Getting a charge account with a low credit limit and paying the bills when possible
b)
Opening a checking account, making regular deposits, and avoiding penalties for insufficient funds
c)
Getting a small loan with a cosigner and have the co-signer repay
d)
Borrowing money from friends and relatives
14.
Which of the following lenders charge the highest interest rate?
a)
Bank
b)
Credit union
c)
Pawn shop
d)
Finance company
15.
You were approved for a loan that combines all your debts into one loan with lower payments based on a longer repayment period or lower APR. This type of loan is a:
a)
Balloon payment loan
b)
Predatory loan
c)
Collateralized loan
d)
consolidation loan
16.
You used your credit card to buy flowers at the florist. The dollar amount of the purchase was:
a)
Deducted immediately from your checking account
b)
Added to your credit card account as a finance charge
c)
Added to your credit card bill and you pay for it at a later date
d)
Put on your credit card bill as a cash advance
17.
Debbie was behind on her stereo installment credit contract payments. As a result, the creditor seized and sold the stereo. The sale price did not cover all of the loan balance, the creditor got a court to order her employer to withhold part of her wages. This court order is called:
a)
Wage assignment
b)
Bankruptcy
c)
Garnishment
d)
Deficiency judgment
18.
The decision to give an applicant credit is made a:
a)
Consumer counseling service
b)
credit reporting agency
c)
Creditor
d)
Consumer
19.
When a borrower fails to repay a loan and there is a co-signer on the loan, the most likely result will be
a)
The co-signer will be held responsible for the repayment of the entire loan plus fees or penalties.
b)
Only the co-signers credit report will show that there has been a default on the loan.
c)
The co-signer will be held responsible for one-half the repayment of the loan.
d)
The co-signer has the opportunity to renegotiate the loan
20.
To improve an UNFAVORABLE credit rating, a person should
a)
pay bills on time.
b)
apply for more credit
c)
increase the number of payroll deductions.
d)
open a checking account
21.
Who uses consumer credit reports in making decisions?
a)
Brokers
b)
Lenders
c)
Schools
d)
Churches
22.
John has a college student loan that he has to repay after he graduates. He will make his monthly payments over ten years.  He has the following kind of loan:
a)
Secured
b)
Non-installment
c)
diversified
d)
Installment
23.
What is a credit score?
a)
A number used to determine how much credit to extend to a person.
b)
A measure used to indicate a person's gross wealth
c)
A reward system that is based on the number of credit cards a person has.
d)
A formula based solely on a person's earnings.
24.
A creditor may deny credit because of:
a)
Bad credit history
b)
Age
c)
Marial Status
d)
Race
25.
The Equal Credit Opportunity Act:
a)
Makes it illegal for creditors to grant credit on any characteristics other than those that reflect creditworthiness
b)
Stipulates that credit must be available to any U.S. citizen
c)
Allows credit to be denied even if the applicant has a good credit history
d)
Allows credit to be denied based on the applicant's cultural background
26.
A credit card finance charge is:
a)
The sales tax
b)
The cost of the items purchased
c)
The dollar amount it costs to use credit
d)
A service fee
27.
Ellen, Barbara, and Paul all charged $1,000 on their credit cards last year. Who paid the most in finance charges?
a)
Ellen, who generally pays off her credit card in full but occasionally will pay the minimum when she is short of cash
b)
Barbara, who always pays off her credit card bill in full after she receives it
c)
Paul, who only pays the minimum amount each month
d)
They all paid about the same since the method of payment per month does not influence the finance charge
28.
One of Andre's seldom-used credit cards has been stolen without his knowledge. When he gets his monthly statement, he realizes that someone else has been using the card and reports it stolen. The maximum amount of the unauthorized purchases he is he liable for is:
a)
0.0
b)
50.0
c)
The total amount
d)
25.0
29.
Using someone else's money, promising to repay at a future date, and paying a fee for use of the money, is the definition for:
a)
Interest
b)
Credit
c)
Investing
d)
Taxation
30.
The type of credit card issued by an oil company, bank, or department store is:
a)
An installment card
b)
A revolving charge card
c)
A debit card
d)
A cash card
31.
Matt's wallet, with all his credit cards, was stolen. He needs to:
a)
Notify the credit card companies after he gets his next account statements to get the 800 telephone numbers to report the stolen card
b)
Check the next account statements for unauthorized charges and, if so, file a complaint with the credit card company
c)
Nothing because retailers will not accept charges by someone who does not own the card
d)
Notify each credit card company immediately
32.
Judi and Phil had a joint VISA credit card while they were married. They are now divorced. Who is responsible for the balanced owed on the VISA card?
a)
Both Judi & Phil
b)
Phil since he has a full time job
c)
Neither because they are divorced
d)
The credit card company
33.
A savings account earns the greatest amount of money when the interest on the account is compounded
a)
Yearly
b)
quarterly
c)
monthly
d)
daily
34.
Sue bought a copy of her credit report, and found incorrect information in it.  She can:
a)
Not dispute negative incorrect information
b)
Request that the credit bureau correct her credit report
c)
Tell the creditor to remove the incorrect information removed or corrected
d)
Make the creditor remove the incorrect information
35.
Jane opened her credit card bill and was surprised by the amount she owed.  She cannot pay the full amount of the bill this month.  The lowest dollar amount Jane is required to pay by the credit card company is the:
a)
Monthly fee payment
b)
Principal payment
c)
Minimum payment
d)
Interest payment
36.
A company offers direct deposit of employees' earnings. The company will still provide each employee with a statement that lists the employee’s
a)
Gross pay only
b)
Net pay only
c)
Gross pay and the amount and type of deductions only
d)
Gross pay, the amount and type of deductions, and net pay
37.

The Truth in Lending Act of 1968 requires creditors to:

a)

State the monthly finance charge and the Annual Percentage

b)

Adhere to federal fixed interest rates and state the monthly finance charge

c)

Have a clean record of services to credit card holders

d)

Limit the amount of money charged for credit

38.

When Mary bought a DVD player, she charged it on her credit card. Her purchase created a(an):

a)

Reserve

b)

Debt

c)

Savings

d)

Investment

39.

Josh is shopping for a car loan. A friend told him to compare the actual cost of the loan for one year expressed as a percentage from three banks. He needs to ask for the:

a)

Finance charge percentage

b)

Annual percentage rate (APR)

c)

Credit insurance percentage

d)

Finance percentage

40.

A good practice when using credit cards is to routinely

a)

take advantage of major sales.

b)

use one credit card to pay debt on another credit card.

c)

pay the complete balance each month.

d)

accept all pre-approved credit card offers.

41.

Which factor would most likely lead to an increase the interest rate on a person's credit card?

a)

Number of purchases.

b)

Late payments

c)

Total amount charged

d)

Number of cash advances

42.

When you mail your credit card payment on the due date, your payment will be considered:

a)

Late, and the company will assess you a late fee

b)

On time as long as the postmark is on or before the due date

c)

Late, but the company will not assess a fee

d)

On time, because you paid it within the five-day grace period.

43.

Redlining is characterized by a lender who denies a loan:

a)

Based on the customer's ability to repay

b)

Because of a customer's age

c)

To customers applying for a loan over a certain dollar amount

d)

To customers living in certain geographic areas

44.

You can continue to charge purchases on your credit card when

a)

The amount you owe on this credit card is above your credit limit

b)

Your payments are always received by the due date

c)

The amount you owe on the card is below your credit limit

d)

You can afford the monthly repayments

45.

If you are denied credit based on your credit report, you are entitled to a

a)

Free copy of the credit report if you request it within 60 days

b)

Hearing with the credit counseling agent

c)

Free copy of the credit report at any time

d)

A free copy of the credit card report within one year

46.

Maxine has an auto loan that she has to pay. She will make monthly payments over five years. She has a(an):

a)

Unsecured loan

b)

Non-installment loan

c)

Balloon payment loan

d)

Installment loan

47.

If you have been denied credit, a job, a license, an insurance

a)

30

b)

60

c)

90

d)

There is no time limit

48.

Who does a credit bureau or credit reporting agency speak to when collecting information about you for your credit file?

a)

Your creditors and landlords

b)

Your doctors and school

c)

Your employers and brokers

d)

Parents and friends

49.

Most Consumer Credit Counseling Services (CCCS):

a)

Charge a fee for setting up a basic budget

b)

Charge a fee for setting up and administering a debt repayment plan

c)

Charge a fee for educating consumers about managing their debts

d)

Do not charge a fee for any of their services

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