WorksheetsManaging Credit- Unit Test
Total questions: 15
Worksheet time: 8mins
Name
Class
Date
1.
1. What are the two most important factors in calculating your credit score?
a)
Payment history and types of accounts
b)
Amounts owed and length of credit history
c)
Payment history and total debt
d)
Length of credit history and new credit inquiries
2.
2. Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT…
a)
Reducing spending by canceling some of her streaming subscriptions
b)
Taking extra shifts at work to increase her income
c)
Making more than the minimum required payment on her debt
d)
Applying for another credit card to use in case she runs out of cash paying off her debt
3.
3. How can your credit score impact your financial well-being?
a)
Only consumers with high scores are approved for credit
b)
Consumers with low scores get lower interest rates on loans than those with high scores
c)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
d)
It generally has no impact on your financial situation
4.
4. Frank and Jasmere are each shopping for a new car for themselves. Each will need a $20,000 loan that they will pay back over a five year period. Frank has a credit score of 730 and Jasmere has a score of 600. Which of the following statements is TRUE?
a)
Over the five year period, Jasmere and Frank will pay the same amount for the car loan
b)
Frank's monthly payment on the auto loan will be about $100 more than Jasmere's payment
c)
Jasmere's monthly payment on the loan will be about $100 more than Frank's payment
d)
Lenders are not allowed to charge people different interest rates based on their credit scores
5.
5. What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?
a)
Snowball method
b)
Make minimum payments
c)
High rate method
d)
Consolidate multiple debts into one new loan
6.
6. Who tracks all of your credit information?
a)
Credit reporting agencies (Equifax, Experian and TransUnion)
b)
Federal government
c)
Consumer Financial Protection Board (CFPB)
d)
Lenders
7.
7. Which of the following things should you have ready when contacting a credit reporting agency to report an error on your credit report?
a)
Your preferred payment method to pay for fixing the error
b)
A list of all of your financial accounts and balances
c)
An explanation of the mistake and any evidence you have supporting your claim
d)
References from a non-family member vouching for your creditworthiness
8.
8. Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?
a)
Paying your bills on-time
b)
Paying down balances on your credit card accounts
c)
Decreasing your utilization of credit
d)
Applying for multiple credit cards
9.
9. Which best describes the Debt Snowball method for paying off debt?
a)
Only make payments on your smallest debt first, then move on to your second smallest debt, and so on
b)
Once your debt "snowballs" out of control, hire a certified credit counselor to help get your finances back on track
c)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the highest balance
d)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
10.
10. Which of these represents a potential consequence of neglecting to pay your federal student loans?
a)
Wages or tax refunds can be garnished
b)
Passport revocation
c)
Driver’s license suspension
d)
Termination from your job
11.
11. What benefits do you receive by taking out a loan with a cosigner?
a)
You don’t get penalized for late payments
b)
You get a discount on future loans after this one is paid off
c)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
d)
You automatically get the same credit score as the cosigner once the loan is paid off
12.
12. Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ?
a)
Accessing credit only becomes more expensive as you get older
b)
Negative marks on your credit report go away faster for younger borrowers
c)
Credit scores are free for anyone under the age of 25
d)
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
13.
13. Review this partial credit report, and then choose the response below that accurately depicts the information on the report.
a)
The borrower paid a $30 fee in February 2015
b)
This borrower was never late with any of their credit payments
c)
This borrower's most recent payment was $30
d)
This borrower was 30 days late on their May 2015 payment
14.
14.The amount you can charge to a secured credit card is limited by…
a)
Your credit score
b)
The amount of money you deposit into an account as collateral
c)
The total amount of money across all your bank accounts
d)
How long you’ve had an account with the bank
15.
15. All of the following would show up on a credit report, EXCEPT...
a)
Salary of your current job
b)
Payment history of your car loan
c)
Credit card payment history
d)
Student loan activity
100 %
