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PF 6.01 Credit Reports and Score

Total questions: 68

Worksheet time: 46mins

Name
Class
Date
1.
Which is not included in an individual’s credit report?
a)
Current and past addresses
b)
Account balances
c)
Bankruptcies and foreclosures
d)
Medical information
2.
Jenny is 18 years old and has applied for credit for the first time. Her credit application was declined because she has no credit history. What should be recommended in order for Jenny to build a positive credit history?
a)
Jenny should acquire several credit cards to establish that she can manage them responsibly.
b)
Jenny should obtain a secured credit card.
c)
Jenny should reapply for the same credit but include a letter of recommendation from someone who knows her well and can vouch for her character.
d)
Jenny should apply for a different type of credit. Since she was applying for a bank loan, she should apply for a credit card.
3.
Becky no longer wants to use her Clothes-R-Us store credit card. What is the best thing she could do with the credit card?
a)
File the credit card away for use at a later time.
b)
Let a family member take over the credit account so her credit score will not be affected.
c)
Keep the credit card in her wallet in case she needs proof of identification.
d)
Close the account by phone and in writing, then destroy the card.
4.
When may a person view his/her credit report for free?
a)
At any time and an unlimited number of times
b)
Once a year, from each of the three main credit reporting agencies
c)
A person may not review his/her credit report
d)
When a person has sufficient financial resources
5.
When Bryce attempted to borrow money at the bank, he learned that his credit score is low. Which best describes what this is likely to mean for Bryce?
a)
The interest rates on his loan will be lower, since his credit score is low.
b)
The purchase price of the item he needs the loan for will be higher due to his low credit score.
c)
The monthly loan payments will be lower due to his lower credit score.
d)
The interest rates on his loan will be higher, since his credit score is low.
6.
Edward wants to develop a positive credit history. How should he do this?
a)
Maintain reasonable amounts of available credit
b)
Have one type of credit account
c)
Pay cash for the majority of purchases
d)
Open credit accounts in his parents’ names
7.
Which is not an example of a data furnisher?
a)
Landlord
b)
Credit card company
c)
Utility company
d)
Medical provider
8.

Credit history does not affect your chances for renting an apartment.

a)

True

b)

False

9.
To build a positive credit history, I should pay cash for all purchases.
a)
True
b)
False
10.

Routinely paying my bills late would not negatively affect my credit history.

a)

True

b)

False

11.
When I apply to borrow money for a car, the loan company will most likely look at my credit history.
a)
True
b)
False
12.
I need to first pay bills, such as a loan or a phone bill to establish credit history.
a)
True
b)
False
13.
Having a small amount of debt is good for my credit history.
a)
True
b)
False
14.
The more credit cards I have, the higher my credit score will be.
a)
True
b)
False
15.
My landlord can report my failure to pay rent to a credit reporting agency.
a)
True
b)
False
16.
If my credit card allows me to charge up to $1,000, I should charge the maximum amount to build my credit history.
a)
True
b)
False
17.
Paying the entire amount on my credit card creates a bad credit history.
a)
True
b)
False
18.

It is not necessary to review my credit report for errors

a)

True

b)

False

19.
A credit report contains my personal information such as my address and social security.
a)
True
b)
False
20.
Late payments are retained on credit reports for 7 years.
a)
True
b)
False
21.
Sarah will turn 18 next month. She plans to apply for a credit card. Which statement is true?
a)
Sarah cannot obtain a credit card until she turns 21.
b)
Sarah will need to use a special application since she is under 25.
c)
Sarah can only obtain a credit card if she has a co‐signer or proof of sufficient income to make the required payments.
d)
Sarah can obtain a credit card by filling out an application as long as she waits until after her 18th birthday.
22.
How can you LEGALLY avoid paying interest when using your credit card?
a)
Pay the minimum balance every month before the due date on the credit card statement.
b)
Pay the credit card balance in full every month before the due date listed on the credit card statement
c)
Limit the use of his credit cards to balance transfers only.
d)
There is not a legal way for him to avoid paying interest if he uses his card during the billing cycle.
23.
Goods, services and/or money received in exchange for a promise to pay back  at a future date.
a)
Promise
b)
Credit
c)
Credit Card
d)
Worthiness
24.

A numerical summary of your credit history that indicates your credit worthiness

a)

Credit Score

b)

Annual Percentage Rate

c)

Interest Rate

d)

Credit Report

25.

A record of a person’s use of credit

a)

Credit Score

b)

Credit Report

c)

Credit Worthiness

d)

Credit Check

26.

When a borrower fails to keep up with mortgage payments and the lender takes possession of the property

a)

Mortgage Loan

b)

Tax Lien

c)

Bankruptcy

d)

Foreclosure

27.

Credit established in advance so that a borrower does not have to apply each time new credit is desired. Also known as revolving credit

a)

Alternative Credit

b)

Closed End Credit

c)

Open End Credit

d)

Credit Score

28.

A loan of a certain amount of money that a borrower must repay in a specified number of equal payments. Also known as installment credit

a)

Credit History

b)

Closed End Credit

c)

Alternative Credit

d)

Open End Credit

29.

Businesses hired by lenders to pursue payments on debts that borrowers have not paid back

a)

Credit Reporting Agency

b)

Collection Agency

c)

Co-signer

d)

Federal Tax Bureau

30.

A person or organization who makes funds available for others to borrow

a)

Borrower

b)

Loan Shark

c)

Co-signer

d)

Lender

31.

Someone who receives something with a promise to return it or its equivalent

a)

Co-signer

b)

Lender

c)

Borrower

d)

Broker

32.

A person who is equally responsible for paying back debt under the credit terms

a)

Parent

b)

Guardian

c)

Co-Signer

d)

Creditor

33.

A legal claim by a government entity to take an individual’s property or income when their taxes are not paid in full

a)

Taxpayer

b)

Tax Lien

c)

Credit Rate

d)

Credit Score

34.

The maximum dollar amount that can be borrowed

a)

Credit Limit

b)

Credit Minimum

c)

Borrowing

d)

Borrow Limit

35.

Which of the following is not a major credit bureau in the US

a)

Experian

b)

Flexperian

c)

Equifax

d)

TransUnion

36.

All activities that have occurred since the last statement are listed here.

a)

Year to Date Totals

b)

Transactions

c)

Credit History

d)

Credit Report

37.

The total new balance, the minimum payment amount, and the date payment is due is included in what section of the credit report

a)

Payment Information

b)

Fees and Interest Charged

c)

Inquiry Information

d)

Consumer Information

38.
Which of the following is listed on your credit report?
a)
Traffic Violations
b)
Amount of cash in your bank account
c)
Hourly wage
d)
Full name, social security, date of birth, current address
39.
Your credit score is based on.....
a)
35% payment history
b)
30% cash money
c)
100% of nada
d)
10% of income
40.
What if I have bad credit?
a)
High interest rates on loans
b)
You can easily be approved for a loan
c)
You have a high credit score
d)
You may have to live with Mr. Trump.  
41.

Car insurance companies use your credit report to determine how much you will pay.

a)

True

b)

False

42.

A credit score of 800 is considered _____

a)

Poor

b)

Fair

c)

Good

d)

Excellent

43.
Telephone and utility companies may use information in your credit report to decide whether to provide services to you.
a)
True
b)
False
44.
A bad credit report cannot affect my chances for getting a job.
a)
True
b)
False
45.

How can you build a positive credit history as a college student?

a)

Get a credit card but don't use it to avoid more debt

b)

Spend up to your credit limit each month

c)

Become an authorized user on an adult's card

d)

Make only the minimum payment each month

46.

Which of the following does NOT contribute to your credit score?

a)

Your payment history

b)

Which banks issued your credit cards

c)

Your debt-to-credit ratio

d)

Length of credit history

47.

How are a credit score and credit report related?

a)

A credit report is determined by the factors in your score

b)

A credit score is determined by the factors in your report

c)

Credit reports are less important than your credit score

d)

They're not related at all

48.

Where can you get a free copy of your credit report?

a)

annualcreditreport.com

b)

freecreditreport.com

c)

getmycreditreport.com

d)

creditreport.gov

49.

A loan of a certain amount of money that a borrower

must repay in a specified number of equal payments.

a)

Lender

b)

Credit History

c)

Credit Report

d)

Closed‐end Credit

50.

Numerous credit applications in a short period of time will create

a)

Negative Credit

b)

Positive credit

51.

Having many of the same types of credit accounts will create

a)

Negative Credit

b)

Positive credit

52.

Routinely paying bills late will create

a)

Negative Credit

b)

Positive credit

53.

Which of the following is NOT on a credit report?

a)

Late medical payments

b)

Repayment history

c)

Medical History

d)

Public Records

54.

How long will inquiries remain on your credit report?

a)

Never on a credit report

b)

Two years

c)

Seven Years

d)

Ten years

55.

How long will Open accounts considered to be in

“good standing” remain on your credit report?

a)

Never on a credit report

b)

Two years

c)

Seven Years

d)

Always on a credit report

56.
A source of credit that may combine elements of open and closed‐end credit
a)
Credit
b)
Alternative Credit
c)
Credit Limit
d)
Borrowed Credit
57.
A loan based on the value of personal property
a)
Pawn Loan
b)
Payday Loan
c)
Refund Anticipation
d)
Rent to Own 
58.
A short‐term loan that provides immediate cash by securing a borrower’s written check
a)
Pawn Loan
b)
Payday Loan
c)
Refund Anticipation
d)
Rent to Own 
59.
Short‐term cash advance secured by a taxpayer’s expected tax refund
a)
Pawn Loan
b)
Payday Loan
c)
Refund Anticipation
d)
Rent to Own 
60.
Tangible items are leased with the condition that the item will be owned by the renter if the term of rent is completed. 
a)
Pawn Loan
b)
Payday Loan
c)
Refund Anticipation
d)
Rent to Own 
61.
The borrower gives the lender his/her automobile title in exchange for a set amount of cash. 
a)
Title Loan
b)
Payday Loan
c)
Refund Anticipation
d)
Rent to Own 
62.
A source of credit that may combine elements of open and closed‐end credit and usually has higher interest rates and fees 
a)
Credit
b)
Alternative Credit
c)
Open End Credit
d)
Closed End Credit
63.

Evan is writing a scholarship essay about the importance of responsible money management. He wants to explain the meaning of borrowing. Which would explain the importance of understanding the process of borrowing money?

a)

When you are borrowing, you are spending future income.

b)

Borrowing is an important part of a responsible financial plan.

c)

Borrowing strongly affects the present self but has less impact on the future self.

d)

Borrowing builds a strong credit history because it requires individuals to file a credit report.

64.

Leah is trying to explain the difference between open-end and closed-end credit to her roommate. Which should she include in her description of closed-end credit?

a)

It is a continuous loan the borrower must repay with a revolving balance.

b)

Equal payments are required on a regular basis until the loan is repaid.

c)

Credit limits vary depending on the loan balance.

d)

Interest rates vary depending on the repayment history.

65.
A loan is a not legal contract. Once you enter into this contract you are not required to make payments in the future according to the agreement
a)
True
b)
False
66.

Jake’s credit application has been declined because of his negative credit history. Which is most likely to be true?

a)

Jake pays his bills consistently and on time.

b)

Jake has applied for 4 credit cards and a car loan in the past 6 weeks

c)

Jake has received 3 traffic tickets in the past 2 months.

67.
Which strategy would be the most effective to decrease the risk of fraudulent use of her credit cards?
a)
Carrying all cards in her wallet so they don't get lost
b)
Signing the back of her card with her signature and "Please see picture ID"
c)
Giving the account numbers over the internet rather than over the phone
d)
Using credit cards for all her purchases so she only needs to pay one bill each month
68.

How long will Closed accounts remain on your credit report?

a)

Ten years

b)

Two years

c)

Seven Years

d)

Always on a credit report

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