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Credit Pre-Test

Total questions: 50

Worksheet time: 13hrs 30mins

Name
Class
Date
1.

What is debt?

a)

Another word for death

b)

Something, typically money, that is owed or due

c)

A loan on which you do not have to pay interest

d)

That which is incurred during childhood and consummated in college

2.

What is a credit card?

a)

The ace of diamonds

b)

A large plastic card designed to ruin consumer's finances

c)

A small plastic card issued by the government attached to a line of credit

d)

A small plastic card issued by a bank and attached to a line of credit

3.

An amount of credit extended to a borrower is known as a...?

a)

Line of Extension

b)

Several dollars lined up in a straight line

c)

Available Credit

d)

In the finance world it is referred to as a "long nose"

4.

Revolving credit is...

a)

a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time.

b)

a type of credit that can be used only once up to a certain limit and must be closed immediately after all payments are due

c)

a spinning door with money in it

d)

a round device that holds credit cards and spins, making it easy to shuffle through all your credit cards quickly

5.

What is a credit score?

a)

a number between 300 and 850 representing your creditworthiness

b)

a statistical number that evaluates a consumer's creditworthiness and is based on credit history.

c)

Often referred to as a FICO score

d)

All of the above

6.

What is an interest rate?

a)

it is your level of interest about a certain topic expressed as a percentage of your total interest

b)

The amount in terms of dollars that you have to pay back on a purchase

c)

it is the rate at which your interest in something expires. The higher the number, the quicker your interest expires

d)

The amount in terms of a rate or percentage that you have to pay back on an amount borrowed

7.

What is a credit report?

a)

A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness

b)

A detailed report of a bank's credit history prepared by a credit expert and used by consumers in determining a bank's creditworthiness

c)

A report which shows which credit cards are better than others

d)

A report invented by Allan Greenspan and credited to Al Gore

8.

The process of collecting funds that are owed and past due is called...

a)

gathering

b)

dollar collecting

c)

overdrafting

d)

collections

9.

What is bankruptcy?

a)

A point in time where everything a person owns has been given to charity

b)

A legal proceeding involving a person or business that is unable to repay outstanding debts in which the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt

c)

When a bank is built on top of a volcano and the volcano erupts causing a bank(e)ruptcy

d)

A legal proceeding involving a person or business that is more than capable of repaying outstanding debts in which all of the debtor's assets are measured and evaluated, and then given away to those in need

10.

What is a loan term?

a)

The amount of time a revolving line of credit can be open

b)

The payment of income to a savings account in regular payments over a set period of time.

c)

The period in which the loan is to be repaid, each payment broken down into individual installments

d)

Specifically related to the black market for human organs, and typically meant as the length of time one's kidney will be used for other purposes

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.
My landlord can report my failure to pay rent to a credit reporting agency.
a)
True
b)
False
13.
I should review my credit report for errors.
a)
True
b)
False
14.
A credit report contains my personal information such as my address and social security.
a)
True
b)
False
15.
Late payments are retained on credit reports for 7 years.
a)
True
b)
False
16.
A bad credit report cannot affect my chances of getting a job.
a)
True
b)
False
17.

Which of the following is TRUE about a credit report?

a)

It is a complete history of one type of credit you have

b)

Credit reports are maintained by the 5 main credit bureaus

c)

You can get a copy of your credit report for free

d)

You can get a credit report only when you're 21 years old

18.

Which of the following is one of the 3 nationally recognized credit bureaus?

a)

Equifax

b)

Federal Reserve

c)

Postal Credit

d)

TripleUnion

19.

Your credit score is not configured off of which of the following:

a)

Payment history

b)

Amount of money owed

c)

Grades in School

d)

Length of credit history

20.

Which is an exceptional credit score?

a)

672

b)

555

c)

713

d)

813

21.

What type of credit score is this 570?

a)

Average

b)

Great

c)

Poor

d)

Excellent

22.

My credit history does not affect my chances for renting my first apartment.

a)

True

b)

False

23.

To build a positive credit history, I should pay cash for all purchases.

a)

True

b)

False

24.

Paying my bills late could negatively affect my credit history.

a)

True

b)

False

25.

a number assigned to a person that indicates to lenders their capacity to repay a loan.

a)

Credit score

b)

Credit report

c)

Credit history

d)

Credit bureau

26.
Numerous credit applications in a short period of time.
a)
Positive Impact
b)
Negative Impact
27.
The most common credit scoring system is called the
a)
FCO
b)
FECO
c)
FISO
d)
FICO
28.
The higher your credit score, the higher your interest rate will be.
a)
True
b)
False
29.
The credit score ranges form 
a)
300-800
b)
250-950
c)
350-900
d)
300-850
30.
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
31.
The amount charged if your payment is received after the billing due date.
a)
late payment fee
b)
overdue fee
c)
withdrawal fee
d)
loser fee
32.
The maximum amount you are allowed to carry as a balance on the card
a)
interest
b)
ARP
c)
credit limit
d)
all of these
33.
This is a fee that some, but not all, credit card issuers charge to use their credit card.
a)
APR
b)
annual fee
c)
monthly fee
d)
non-sufficient funds fee
34.
The amount you must pay on a credit card, based on a percentage of the outstanding balance.
a)
minimum fee
b)
minimum payment
c)
monthly statement
d)
minimum monthly interest charge
35.
Benefits of credit cards include:
a)
safe and convenient, bonuses are offered
b)
allows you to build a positive credit report
c)
needed for reservations and online shopping
d)
all of these
36.
Which one is considered a danger of using a credit card
a)
no cash needed
b)
leads to overspending
c)
convenient
d)
earns rewards
37.
A plastic card that you use to access a line of pre-established credit is called:
a)
debit card
b)
credit card
c)
visa
d)
mastercard
38.
Your credit score is not configured off of which of the following:
a)
Payment history
b)
Amount owed
c)
Where you live
d)
Length of credit history
39.
One of the 5 C's of credit that shows one's ability to pay is
a)
capital
b)
collateral
c)
character
d)
capacity
40.
To build a good credit history, you should
a)
open as much credit as possible quickly
b)
use the maximum credit allowed on all your credit cards
c)
pay on time and as much of your balance as possible
d)
all of these
41.
Over time, people who pay off their credit card balance in full every month will pay less in interest on their credit card.
a)
true
b)
false
42.
One of the 5 C's of credit that refers to property that secures the loan is
a)
capital
b)
collateral
c)
character
d)
capacity
43.
What does APR stand for?
a)
American Peoples Reports
b)
Annual Progress Report
c)
American Percentage Rate
d)
Annual Percentage Rate
44.
What is credit?
a)
Free money
b)
Borrowed money
c)
Standard of living
d)
A term that causes tears
45.
How is credit used?
a)
 Employers may check job applicants' credit.
b)
Before renting an apartment, the landlord will check the prospective tenant's credit.
c)
If you apply for a cell phone or credit card, your credit will be checked. 
d)
All of these are correct, these are only some of the ways credit can be used. 
46.
What is a credit score?
a)
A credit score is a three-digit numerical rating that reflects how likely you are to fail at paying your debts
b)
A five-digit numerical rating that reflects how likely you are to repay your debt. 
c)
A three-digit numerical rating that reflects how likely you are to repay your debt. 
d)
A credit score is a five-digit numerical rating that reflects how likely you are to fail at paying your debts
47.
What financial habits determine your credit score?
a)
Payment History & Amount you owe 
b)
Length of credit history & Amount of new credit applied for recently
c)
Types of credit open
d)
All of these are correct
48.
What are the three major Credit Reporting Agencies (CRAs)?  
a)
Equifax
b)
TransUnion
c)
Experian
d)
All of these are correct
49.
What is your job as a borrower?
a)
To pay back your loans promptly
b)
To borrow as much as humanly possible
c)
Spend your loans and not pay them back
50.
Which of the following is an ADVANTAGE of credit?
a)
No need for carrying cash
b)
Annual Fees
c)
Interest Rates

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