WorksheetsCh. 5 - Credit Review - Part 1
Total questions: 16
Worksheet time: 9mins
Your credit score can range from?
300-850
275-800
300-800
250-750
What is a variable interest rate?
The interest rate on your loan does not change over the life of your loan.
Annual Interest Rate
Changes with the index interest rate.
What the lender charges for using credit, usually a percentage.
An example of Open-End/Revolving Credit is what? (2 correct answers)
A Personal Loan
A Cash Advance
HELOC
Credit Cards
What is an example of Closed-End Credit (2 correct answers)
Mortgage
Auto Loan
Credit Card
Cash Advance
What is the Schumer Box?
Monthly Statements for your credit card
HELOC on home loans
A business loan
Helps compare credit card fees and rates
This loan can charge you up to 400% interest.
Secured Loans
Unsecured Loans
Personal Loans
Payday Loans
What category impacts your credit score?
Job History
Monthly Loan Payment Amount
Lower Interest Rates
Credit Card Utilzaion
What is a secured loan?
Lower interest rates, uses collateral to secure its money, auto loan or home loan.
Higher interest rates, does not require collateral, student loan or personal loan.
How often the interest is added to the loan principal each year.
What is an unsecured loan?
Lower Interest Rates, uses collateral to secure its money, auto loan or home loan.
Higher Interest Rates, does not require collateral, student loan or personal loan.
How often the interest is added to the loan principal each year.
What is compound frequency?
Lower Interest Rates, uses collateral to secure its money, auto loan or home loan.
Higher Interest Rates, does not require collateral, student loan or personal loan.
How often the interest is added to the loan principal each year.
What are some advantages of using a credit card?
If you pay off your balance every month in full, it is similar to a short-term interest-free loan.
If you need to carry a balance, the interest rates are generally quite low (less than 7%)
Since it is tied directly to your checking account, it prevents you from spending more money.
Using it will always negatively affect your credit score.
How long does information stay on your credit report?
12 years on Chapter 10 bankruptcies
5 years on civil claim judgements
7 years on Chapter 9 bankruptcies
7 years for any late payments
Soft Credit inquiries hurt your credit.
True
False
What are the four features of a loan?
Interest, debt, principal, and payment.
Term, debt, payment, and APR
Payment, compound interest, principal, and debt.
Principal, interest, payment, and term.
Which type of loan has the consumer pay the ongoing interest but leaves the principal payment till the end of the loan?
Open-Ended Line of Credit
Deferred Loan
Interest-only Loan
Amortized Loan
What type of loan has a monthly payment that stays the same, the
interest portion decreases while the principal portion increases. Principal balance will be zero at the time of final payment.
Open-Ended Line of Credit
Deferred Loan
Interest-only Loan
Amortized Loan
