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WorksheetsModule 9 (Credit) Test Review
Total questions: 21
Worksheet time: 15mins
Which is an example of a secured loan?
Mortgage
Credit Card
Personal loan of $2,500
Which of the following is a characteristic of installment credit?
Varying interest rates depending on the repayment history.
A continuous loan the borrower has to repay with a revolving balance.
Make equal payments on a regular basis until the loan is repaid.
Which of the following is NOT considered an advantage of using a credit card?
Credit cards eliminate the need for savings.
Credit cards offer protection against fraud.
Credit cards are often required to hold hotel and car reservations
How can a credit card holder avoid paying interest on the balance owed?
Borrow cash against your credit card, called a cash advance.
Pay the minimum payment required every month.
Pay the balance in full every month before the due date.
Why are payday loans often difficult for consumers to pay back?
Consumers have to make payments in installments.
Payday loans are usually used by people with money problems.
Payday loans have to be repaid in cash.
You want to buy a new tablet computer from an electronic store. Which would be the least expensive way to finance this purchase?
Loan from your bank.
Credit card from an offer received in the mail.
Loan from a Payday Store
How are home loans and auto loans alike?
You risk the loss of these assets if you are unable to pay.
They require higher interest payments than credit cards.
The annual percentage rate is charged as compound interest on your balance.
What do you call property you own that is worth more than your debts?
Collateral
Capital
Capacity
Condition
Which of the following laws requires creditors to fully disclose all fees and finance charges associated with credit?
Fair Credit Reporting Act
Fair Credit Billing Act
Consumer Credit Protection Act
What information do creditors submit to credit bureaus?
Money owed and payment history
Character, capacity, and capital
Checking and savings account balances
What information is NOT included when calculating an individuals credit score?
Inquiries for new credit
Salary
Length of credit history
Why will a low credit score affect an individual financially?
Individual will have to pay lower monthly payments on loans.
Individual will pay higher interest rates for credit.
Purchase price for items will be higher.
Which is the following is the BEST way to improve a credit score?
Check your credit report for accuracies once a year.
Mail payments at least five working days before due date.
Contact creditors if you have trouble paying bills on time.
Which of the following choices correctly orders the steps you should take for establishing and building a credit history?
Open store credit account, open savings account, open checking account
Open a checking account, get a small loan, apply for a credit card
Apply for a major credit card, open a store account, pay bills on time
What is the type of bankruptcy where creditors ask a court to declare a person bankrupt?
Chapter 7
Chapter 13
Involuntary
Voluntary
Chapter 13 bankruptcy is a compulsory, court-enforced plan to repay a portion of debts over a period of how long?
6 months
3 years
7 years
Which of the following types of debts would be discharged with Chapter 7 bankruptcy?
Income taxes and penalties
Credit Card Bills
Child support
Which of the following is NOT a service performed by a credit counselor?
Consolidate your debts and help you pay them off faster.
Eliminate or reduce late charges and fees.
Help you apply for a new credit identity.
Which of the following statements is TRUE about credit counseling services?
You are required to follow the credit counselor's budget.
Credit counselors work with your creditors to reduce your monthly payments.
All credit counseling services charge fees up front for their services.
How is Chapter 7 bankruptcy different from Chapter 13?
Chapter 7 is the legal act of asking a court to declare you unable to pay your bills.
You are not required to sell your assets under Chapter 13.
People filing Chapter 7 bankruptcy have to have a certain income.
Which of the following statements about bankruptcy is NOT true?
Bankruptcy gives people who are heavily in debt a fresh start.
Bankruptcy will not affect certain types of debts a debtor may have.
Future credit will be easy to obtain for people who have filed bankruptcy.
