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Unit 3: Credit Test

Total questions: 46

Worksheet time: 25mins

Name
Class
Date
1.

Why is it important to establish positive credit history?

a)

Higher credit scores result in lower interest rates on loans

b)

You are more likely to be offered a loan by a bank

c)

Positive credit history results in higher credit scores

d)

All of the above

2.

How long will a negative credit action usually remain on a credit report?

a)

4 years

b)

11 years

c)

7 years

d)

15 years

3.

What is important in establishing good credit?

a)

Making payments on time

b)

Being late on payments

c)

Spending 100% of your credit limit

d)

Missing a payment

4.

What is included under credit history on a credit report?

a)

Date of birth

b)

Late payments

5.

When goods, services, and/or money is received in

exchange for a promise to pay back a definite sum of money at a future date.

a)

tax lien

b)

credit report

c)

credit history

d)

credit

6.

Who would be more likely to get a car loan?

a)

Dave with a credit score 560

b)

Julie with a credit score 780

7.

A person or organization who makes funds available to borrow.

a)

lender

b)

borrower

8.

Open accounts in "good standing" stay on a credit report for....

a)

2 years

b)

7 years

c)

10 years

d)

Never on a credit report

e)

Always on your credit report

9.

Inquiries stay on a credit report for....

a)

2 years

b)

7 years

c)

10 years

d)

Never on a credit report

e)

Always on your credit report

10.

A numerical summary of your credit history that indicates your credit worthiness

a)

Credit Score

b)

Credit Report

11.

A record of a person’s use of credit

a)

Credit Score

b)

Credit Report

12.

When may a person view his/her credit report for free?

a)

At any time and an unlimited number of times

b)

Once a year, from each of the three main credit reporting agencies

c)

A person may not review his/her credit report

d)

When a person has sufficient financial resources

13.

Late payments stay on a credit report for....

a)

2 years

b)

7 years

c)

10 years

d)

Never on a credit report

e)

Always on your credit report

14.

All of the following are part of a credit report EXCEPT:

a)

Spending Habits

b)

Loan Repayment

c)

Credit Limit Utilization

d)

Current Credit Inquiries

15.

Failing to pay federal student loans may result in:

a)

Reduced student loan interest

b)

Higher credit score

c)

Tax refund garnishments

d)

Revocation of your degree

16.

A cosigner on a loan can help by:

a)

Reducing monthly payments

b)

False

c)

Boosting approval odds

d)

Offering collateral for the loan

17.

Establishing credit early can help with:

a)

Quick loan approvals

b)

Higher credit card limits

c)

Avoiding yearly credit checks

d)

Getting better interest rates

18.
The cost of credit expressed as a yearly interest rate is known as:
a)
Annual Percentage Rate (APR)
b)
Annual Fee
c)
Penalty APR
d)
Introductory Rate
19.
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
20.
What is an annual fee? 
a)
The act of transferring money 
b)
A fee charged by a card issuer for being a card holder. 
c)
The days between the last statement and the current statement. 
d)
A fee charged to a cardholder's account once a payment is late. 
21.
Examples of penalty fees include:
a)
over-the-limit fee
b)
late payment fee
c)
returned payment fee
d)
all of these
22.
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
23.
It is wise to compare credit card offers before choosing one
a)
True
b)
False
24.
The cost of borrowing money is referred to as 
a)
Interest 
b)
Annual Percentage Rate 
c)
Credit 
d)
Credit Line 
25.
Having a high credit score will allow lenders to give you lower interest rates.
a)
True
b)
False
26.
The least amount that must be paid on a credit card each month is
a)
Late Fee
b)
Credit Limit
c)
Payment amount
d)
Minimum Payment
27.
How can a cardholder avoid paying interest on a credit card?
a)
Do not pay anything
b)
Pay the minimum payment after its due date
c)
Pay the minimum balance every month
d)
 Pay the balance in full every month
28.
You have a choice between two credit cards: American Express 8.99% or Chase Sapphire 12.99%. Which card offers the better rate?
a)
American Express
b)
Chase Sapphire
c)
Neither
d)
All of the above
29.

A small plastic card with a specific account number

a)

Credit

b)

Debit

c)

Both

30.

This card is linked to a checking account

a)

Credit

b)

Debit

c)

Both

31.

Users can earn rewards like cash back or points toward travel

a)

Credit

b)

Debit

c)

Both

32.

Users can set up a personal security code called a PIN number

a)

Credit

b)

Debit

c)

Both

33.

Customers spend the money in their accounts at the time of purchase

a)

Credit

b)

Debit

c)

Both

34.

Users borrow money on the card and pay it at a later time

a)

Credit

b)

Debit

c)

Both

35.

Purchases are subject to interest charges if the balance is not paid in full

a)

Credit

b)

Debit

c)

Both

36.

Users can sometimes be responsible for an annual fee or other penalties

a)

Credit

b)

Debit

c)

Both

37.

Card balances can be paid at the end of the month to avoid interest

a)

Credit

b)

Debit

c)

Both

38.

This card can be used at an ATM to withdraw cash from a checking account

a)

Credit

b)

Debit

c)

Both

39.

Users are limited to a specific amount called a credit limit

a)

Credit

b)

Debit

c)

Both

40.

Payment history is recorded on a credit report

a)

Credit

b)

Debit

c)

Both

41.
A mathematical tool created to help   lender evaluate the risk associated with lending customers money
a)
Credit
b)
Credit Score
c)
Credit Report
d)
Credit History
42.
A record of a consumer's credit history
a)
Credit History
b)
Credit Inquiry
c)
Credit Report
d)
Credit
43.
Consumer gives permission to company to check their credit
a)
Soft Check
b)
Hard Check
c)
Soft Score
d)
Hard Score
44.
The most common credit scoring system is called the
a)
FCO
b)
FECO
c)
FISO
d)
FICO
45.
The credit score ranges form 
a)
300-800
b)
250-950
c)
350-900
d)
300-850
46.

The three credit reporting agencies we talked about in class are:

a)

Trans Union, Equifax & FICO

b)

FICO, Equifax & Lending Tree

c)

Equifax, Experian & Trans Union

d)

Experian, FICO & Equifax

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