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WorksheetsCredit Test
Total questions: 70
Worksheet time: 48mins
Using a loan could help with the purchase of which of the following?
A. A new television
B. A dream wedding
C. A house
D. Airline tickets to your dream vacation
When are loans a good option to use?
A. To pay for airline tickets to you dream vacation.
B. When paying for higher education
C. To by a new tv
D. For a dream wedding
What should you NOT us a loan to purchase?
A. house
B. Tuition for higher education
C. New TV
D. A car
Annual Percentage Rate (APR), credit limit, and penalties and fees are important to consider when _____.
A. Choosing a financial advisor
B. Choosing a credit card
C. Looking at your credit score
D. Selecting a financial institution
Having a great credit score will make it easier for you to get into a better educational institution.
True
False
Secured loans are less costly than unsecured loans because _________.
A. They usually have a lower interest rate.
B. They require collateral.
C. They are less risky for the financial institution.
D. All of these are true.
Credit Cards can help ____ when paid off on time regularly.
A. Build Credit History
B. act as a for of identification
C. Lower your debt
D. balance your checking account
What option will NOT be available if you are behind on loan payments?
A. A financial institution may offer for you to pay a little now and pay the rest after your next pay day.
B. You can borrow money from friends and family.
C. You can ask to get out of your loan.
D. Your financial institution might allow you to defer the loan but you'll have to pay the interest.
A person who has a car can AVOID having the car repossessed by
Having the car serviced
Driving carefully until loan is repaid
Taking a driver's education course
Making payments in full by the due date
If a person has a credit score of 780, he/she is more likely to
Be charged a lower interest rate for a loan
Be charged no interest for a loan
Need to have at least 2 credit cards to get a loan
Need proof of home ownership to get a loan
The cost of borrowing money is commonly referred to as the
Rate of inflation
Interest rate
Time value of money
Introductory rate
If a person decides to lend money to a friend, it is strongly advised that the person lending the money
Charge a higher interest rate than banks are charging for a loan
Has a good credit score
Ask the borrower to sign an agreement explaining the terms of the loan
Ask the borrower to not have any unpaid bills
An advantage of requesting a free annual credit report is that the person can
determine personal net worth
check the report for errors
earn higher interest on savings
use the report to request a salary increase
A recent high school graduate was denied $5,000 car loan. The graduate has a better chance of being approved for a loan by:
applying for a loan from the Federal Deposit Insurance Corporation (FDIC)
applying for a loan from the Securities and Exchange Commission (SEC)
having a person with a good credit score cosign for the loan
requesting a larger loan than is actually needed
If a person has a $1,000 line of credit, the person can charge:
no less than $1,000 a month on the card
up to $1,000 on the credit card
$1,000 at each place that accepts the credit card
$1,000 without having to pay interest on the credit card balances
What are the three main credit bureaus;
Experifax, Transperian, Equifax
Expertise, Transfax, Equiunion
Experian, Transunion, Equifax
FICO, Transunion, Equifax
John puts $10,000 down payment on a $100,000 home. Jane puts $20,000 down payment on a $100,000 home. They both have 20-year mortgages at the same fixed-interest rate. Which is a true statement about their mortgages?
John's payment will be lower than Jane's
Jane's payment will be lower than John's
the payments will be the same for John and Jane
John's payment will vary from month to month
High interest rate loans are usually given to persons who:
have a credit score of of 780 or higher
own a home
own a car
have a poor credit score
A college student is planning to take a student loan from the government; payments on most of these loans are:
due one month after a loan is approved
due at the end of each school semester
not due until after the student leaves school or graduates
not required if the student maintains an A or B average
To AVOID being charged a late fee on a credit card bill, a person must pay the payment:
on the day the credit card bill is due
by mail on the date the credit card bill payment is due
so that the payment is received by the credit card company on or before the due date
a week after receiving the bill from the credit card company
A good credit score is 700 and above
true
false
One good reason to use a credit card is to build credit history
true
false
Your credit score is not configured off of which of the following:
Payment history
Amount of money owed
Grades in School
Length of credit history
Which is an exceptional credit score?
672
555
713
813
What type of credit score is this 570?
Average
Great
Poor
Excellent
My credit history does not affect my chances for renting my first apartment.
True
False
Paying my bills late could negatively affect my credit history.
True
False
a number assigned to a person that indicates to lenders their capacity to repay a loan.
Credit score
Credit report
Credit history
Credit bureau
300-800
250-950
350-900
350-850
Which of the following does NOT contribute to your credit score?
Your payment history
Which banks issued your credit cards
Your debt-to-credit ratio
Length of credit history
How are a credit score and credit report related?
A credit report is determined by the factors in your score
A credit score is determined by the factors in your report
Credit reports are less important than your credit score
They're not related at all
This is the period of time before the due date where you can make your payment in full without getting charged interest
Grace period
Posting date
Debit
Transaction date
This is the smallest amount of your credit card bill you must pay in order to remain in good standing with the lender
APR
Maximum payment
Minimum payment
Grace period
In order to avoid paying any interest on your credit card bill you must...
Pay your balance owed in full
Pay half your balance owed
Pay the minimum payment
Open up multiple credit cards
Which item is important to consider when selecting a credit card?
Annual Percentage Rate (APR)
Fees
The look of the credit card
Both APR and fees
What is a benefit of having a good credit score?
Loan sharks will be less likely to bother you.
You'll get accepted to better education institutions
You'll get more job offers.
When you need a loan, you'll have more loan offers to pick from.
To maintain a good credit score you must ______.
manage your debt wisely.
check your credit score every week.
have credit monitoring.
have many open credit cards.
Paying only the minimum balance on your credit card can lead to...
an increase in your credit score
paying more interest.
late fees
All of the above
All of the following are benefits to paying the full balance on your credit card each month EXCEPT:
Your credit score can decrease.
You won't have to pay interest
You won't have to pay any late fees.
Your credit score can increase
When looking for pre-approval on a car loan you should...
get a loan from the car dealer directly to keep things simple
select the loan that has the longest repayment period.
compare pre-approval offers and select the one that is best for you.
Going directly to a car dealer for a loan to keep things simple is a...
great idea because they want you to get the car so it'll be the best offer
not great because they typically offer higher interest rates
great idea because you don't have to deal with another lender.
not great because car dealers don't offer loans
Which is a positive reason for using a credit card to finance purchases?
You will get charged high interest.
Paying it off on time can help build your credit history
You won't have to budget for your credit card expenses.
You'll be able to spend a lot of money without paying it back
Credit cards can help _____________ when paid off on time regularly.
build credit history
act as a form of identification
lower your debt
balance your checking account
Hillary and Stephanie have both borrowed $15,000 from the same bank to buy the same model of a new car. Hillary's credit score is 732 and Stephanie's credit score is 588. Who is likely to pay a lower finance charge?
A. They will pay the same because they used the same bank.
B. Hillary.
C. Stephanie.
D. They will pay the same because they bought the same car.
An example of identity theft is when an individual
A. uses a parent’s charge account to buy lunch for friends.
B. uses another person’s information to open an account.
C. notifies a credit reporting agency of an unpaid debt.
D. has the same name as another person in the same state.
Scott and Eric are young men with good credit reports. They work at the same company and make approximately the same salary. Scott has borrowed $6,000 to take an overseas vacation. Eric has borrowed $6,000 to buy a truck. Who is likely to pay the lowest finance charge?
A. Eric will pay less because the truck is collateral for the loan.
B. Scott will pay less because people who travel overseas are less risky to lenders.
C. They will both pay the same because the rate of interest on the loan is set by law.
D. They will both pay the same because they are borrowing the same amount of money.
A person purchases $2,500 of furniture from XYZ Department Store. She decides to use the store’s plan where a person makes 12 equal payments over the next year to pay for the purchase. She signs a contract which specifies what her payments are and when they are due. This is an example of
A. an installment plan.
B. a predatory loan.
C. a cash purchase.
D. a line of credit.
The Truth-in-Lending Act requires that borrowers be given
A. information on the cost of the loan.
B. 45 day notice if interest is being increased.
C. the features of the extended warranty.
D. the reasons credit has been denied.
