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WorksheetsCredit Unit Test
Total questions: 77
Worksheet time: 1hrs 1mins
Name
Class
Date
1.
All of the following are dangers of credit, EXCEPT:
a)
Overspending
b)
Can be dangerous in tough economic times
c)
Can increase your financial options
d)
Can be expensive
2.
True or False: Credit can lead to overspending.
a)
True
b)
False
3.
Which of the following is NOT a factor to consider when taking out a loan?
a)
Length of the loan
b)
Total Cost of the loan
c)
Impact of the monthly payment on your budget
d)
How much time it takes to receive the loan
4.
How do you ruin your credit?
a)
Have someone Co-Sign your loan
b)
Not pay your bills
c)
Get a gas/Apartment card
d)
Cats
5.
What do you have to have to declare bankruptcy?
a)
State Judge
b)
Defendant
c)
Proof
d)
Tears
6.
Which of the following will increase your credit card's APR?
a)
Paying the minimum.
b)
Missing a credit card payment.
c)
Paying off the full balance.
d)
Cashing in on rewards points.
7.
Which of the following statements about credit scores is TRUE?
a)
Credit scores reflect how likely individuals are to repay their debts.
b)
Credit Scores range from the low 300's to the mid 800's.
c)
Each person has three credit scores.
d)
All of the above.
8.
Which of the following actions can NEGATIVELY impact your credit score?
a)
You disputed an item on your credit report.
b)
You forgot to pay the cable bill.
c)
You pay all your bills in cash.
d)
You use a small amount of your available credit.
9.
Which of the following would IMPROVE your credit score.
a)
Closing out old credit cards.
b)
Paying off your credit card bill.
c)
Using a large portion of your credit limit.
d)
Opening a new savings account.
10.
Having a low credit score can make it more difficult to:
a)
Obtain a car loan.
b)
Open a new credit card.
c)
Secure an apartment lease.
d)
All of the above.
11.
Interest is:
a)
A charge for lending money to a bank
b)
The amount owed for borrowing money
c)
the amount added into your savings when opening a bank account
d)
a charge for the convenience of accessing money stored in your bank account
12.
You will NOT owe any interest if you pay your entire credit card bill by the due date.
a)
True
b)
False
13.
The "term" is the initial amount of money borrowed in a loan.
a)
True
b)
False
14.
______________ is the amount of money you pay to use someone else's money.
a)
Interest
b)
Credit
c)
Principal
d)
Term
15.
Before using credit you should ask yourself is using credit worth it for this purchase?
a)
True
b)
False
16.
An example of closed-ended credit is a(n) _______________
a)
Installment loan
b)
Credit card
c)
Equity Credit line
17.
Type of loan used specifically for purchasing a home is a __________
a)
Mortgage
b)
Student Loan
c)
Equity Line of Credit
d)
Credit Card
18.
Another name for open ended credit is ____________ credit
a)
Never ending
b)
Revolving
c)
Spinning
d)
Endless
19.
_____________ is a report that details how a person has used credit in the past.
a)
Credit report
b)
Credit card
c)
Credit score
d)
Credit history
20.
This is when the interest rate will remain the same for the life of the loan
a)
Adjustable rate
b)
Balloon rate
c)
Never changing rate
d)
Fixed rate
21.
The amount of time your are obligated to make payments on a loan is the
a)
Interest rate
b)
Term
c)
Principal
d)
Annual percentage rate
22.
Which of the following can impact your credit score?
a)
Living with our parents to cut down on expenses
b)
Making a late car loan payment
c)
Paying cash for a used car
d)
Getting bonus pay from your employer
23.
The fee incurred when you exceed our credit limit on your credit card is the __________
a)
Annual fee
b)
Cash-advance fee
c)
Service fee
d)
Over the limit fee
24.
__________ is the entire amount of money you owe to lenders
a)
Bankruptcy
b)
Debt
c)
Obligation
d)
Duty
25.
The legal process to get out of debt when you can no longer make all your payments is called _________
a)
Bankruptcy
b)
Indebtedness
c)
Financial disaster
d)
Trouble
26.
Items bought on credit and paid for over long periods of time cost the same as paying cash
a)
True
b)
False
27.
Money you pay up front toward the purchase to reduce the loan amount
a)
Down payment
b)
Up front payment
c)
Principal
d)
Interest
28.
A yearly fee for having an open account
a)
Annual Fee
b)
Yearly Fee
c)
Year End Fee
d)
Anniversary Fee
29.
The amount credit costs, expressed as a yearly percentage.
a)
periodic rate
b)
APR
c)
finance charge
d)
previous balance
30.
All of the following are examples of benefits of credit, EXCEPT:
a)
Increase your standards of living
b)
Safer than cash
c)
Buying power
d)
Can tie up future income
31.
Examples of penalty fees include:
a)
over-the-limit fee
b)
late payment fee
c)
returned payment fee
d)
all of these
32.
How can you avoid paying interest fees on your credit card?
a)
Only use it for groceries
b)
pay off the full balance, on time, each month
c)
you cannot avoid interest fees
d)
only use Discover
33.
To build a good credit history, you should
a)
pay the minimum or more on your account each month
b)
pay on time or early
c)
be careful not to take on too much debt
d)
all of these
34.
The maximum amount you may borrow on a credit card is known as:
a)
creditworthiness
b)
credit report
c)
credit limit
d)
variable rate of credit
35.
True/False: The longer the loan, the less you pay in interest.
a)
True
b)
False
36.
Compounding interest is great when you are saving. How do you feel about it when it comes to loans?
a)
It is the best thing ever!
b)
I can take it or leave it.
c)
No thank you. The loan already costs enough.
37.
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
38.
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
39.
Which one is considered a danger of using a credit card
a)
no cash needed
b)
leads to overspending
c)
convenient
d)
earns rewards
40.
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
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.
What does APR stand for?
a)
American Peoples Reports
b)
Annual Progress Report
c)
American Percentage Rate
d)
Annual Percentage Rate
43.
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
44.
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
45.
What are the three major Credit Reporting Agencies (CRAs)?
a)
Equifax
b)
TransUnion
c)
Experian
d)
All of these are correct
46.
A federal student loan is provided by...
a)
Private companies
b)
The state you live in
c)
US Federal government
d)
Investors
47.
What does it mean to Co-sign on a loan.
a)
That means 2 names are on the loan and both are affected if you pay on time or late
b)
That means 2 names are on the loan but only the main signer is affected
48.
What is the difference between down payment and loan principal?
a)
The down payment is money you pay at the time you buy something. Loan principal refers to the initial amount of money you are borrowing to buy that something.
b)
The down payment is money you are required to pay at the time you buy something. Loan principal refers to the total you will end up paying for the thing you are buying.
c)
The down payment is money you are required to pay at the time you buy something. Loan principal refers to how much money you will pay in interest on the loan.
d)
The down payment is how much money you need to borrow in order to meet the price of something you want to buy. The loan principal refers to the details of how the money will be paid back.
49.
Which of the following describes the major difference between student loans and scholarships?
a)
Loans have a very high interest rate where scholarships do not.
b)
Scholarships are only awarded if a student has good credit.
c)
Scholarships do not have to be paid back whereas a loan does.
d)
Loans go on a person’s credit report whereas a scholarship does not.
50.
What is one characteristic of open-end credit?
a)
A down payment must be made before receiving the loan
b)
Individuals are allowed to borrow an unlimited amount of money as long as they pay it back
c)
Credit is extended in advance so the borrower does not have to apply for credit each time credit is desired
d)
Payments are equal and are required on a regular basis
51.
Your credit score is not configured off of which of the following:
a)
Payment history
b)
Amount owed
c)
GPA
d)
Length of credit history
52.
Which one is NOT a benefit of having a credit card?
a)
raises standard of living
b)
convenient
c)
interest
d)
increase financial options
53.
It is wise to compare credit card offers before choosing one
a)
True
b)
False
54.
2. An account in which the buyer pays according to a set schedule of payments is
a)
cash loan
b)
credit rating
c)
installment account
d)
revolving charge account
55.
4. A legal proceeding for the purpose of stating a person's inability to pay his or her debts.
a)
credit agreement
b)
credit
c)
credit rating
d)
bankruptcy
56.
8. Something of value held by the creditor in case a person is unable to repay the loan.
a)
bankruptcy
b)
revolving charge account
c)
collateral
d)
credit
57.
A ________ provides loans and a ________ takes out a loan.
a)
creditor, lender
b)
creditor, debtor
c)
borrower, lender
d)
lender, loaner
58.
Which of the following is NOT an example of an open-end (revolving) credit
a)
mortgage
b)
credit card
c)
service credit
d)
store charge card
59.
A loan with a collateral is a
a)
secured loan
b)
a false loan
c)
an un-secured loan
d)
a classic loan
60.
When a creditor takes back a collateral or an item purchased on credit .
a)
recall
b)
repossession
c)
recollection
d)
booting
61.
The person who promises to repay your loan if you fail to pay is a
a)
co-signor
b)
co-applicant
c)
secured signor
d)
sponsor
62.
Bankruptcy stays on your credit report for
a)
5 years
b)
7years
c)
10 years
d)
20 years
63.
When a person is unable to pay off their debts, he/she may
a)
file for personal bankruptcy.
b)
file for business bankruptcy.
c)
sue the creditors for harrassments.
d)
do nothing.
64.
A FICO (credit) score is largely based on
a)
character, capacity, collateral, conditions, capital
b)
bankruptcy records
c)
income
d)
testimonials from friends
65.
Foreclosure happens when
a)
you do not pay your mortgage
b)
you do not pay your car loan
c)
when you fail to pay property taxes
66.
How well you manage credit affects
a)
the price you pay for loans.
b)
price you pay for insurance.
c)
deposit or down payment requirements.
d)
all are true.
67.
Which of the following may be used to make lending decisions?
a)
gender
b)
age
c)
marital status
d)
income
68.
Withdrawing money at an ATM using your credit card is called a
a)
balance transfer
b)
debit transaction
c)
cash advance
d)
redeeming your rewards
69.
When creditors offer unfair high interest loans to consumers who have trouble qualifying for other loans
a)
predatory lending
b)
malpractice
c)
relief funding
d)
none are correct
70.
Which law gives consumers the right to request a free credit report if they are denied a loan?
a)
Equal Credit Opportunity Act
b)
Truth-in-Lending
c)
Fair Debt Collection Practices Act
d)
Fair Credit Reporting Act
71.
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
72.
I should review my credit report for errors.
a)
True
b)
False
73.
Money is withdrawn directly from a checking or savings account.
a)
Debit Card
b)
Credit Card
74.
Consumers can purchase items now and pay for them later.
a)
Debit Card
b)
Credit Card
75.
A PIN (Personal Identification Number) is required to make a purchase.
a)
Debit Card
b)
Credit Card
76.
If you discover that your identity has been stolen, you should do all of the following except
a)
contact your Aunt Ruth to complain
b)
contact the credit bureaus
c)
contact the creditors
d)
file a police report
77.
Which of the following is NOT one of the 3 "C's" of credit?
a)
character
b)
confidence
c)
capacity
d)
capital
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