Free Printable Credit Review

Worksheets

Credit Review

Total questions: 28

Worksheet time: 14mins

Name

Class

Date

Which of the following statements comparing credit and debit cards is TRUE?

Far more businesses accept credit cards than debit cards

Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard

Credit card companies provide you with a monthly statement, while debit cards do not

With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later

Which of the following is most likely to represent a fixed rate, secured debt?

A student loan

A credit card

A prepaid debit card

An auto loan

Which of these statements best explains why it's often a good idea to pay more than the monthly amount due on an amortized loan?

Every time you pay extra, the lender will reduce the interest rate they're charging by a small amount

The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly

The extra payment will be applied to the interest you owe, which will reduce the overall cost of your loan

Amortized loans typically have much higher interest rates than credit cards, so they're the best place to put your extra cash

If you are having trouble making auto loan payments and are really following a tight budget, which recommendation below represents the WORST advice?

Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help

Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control

Continue making all payments and call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms

Explore whether a free or non-profit credit counseling service could help

When loans are amortized, monthly payments are _______ , while the amount of your monthly payment applied to interest ________ and the amount of your monthly payment applied to the principal _______ over time.

Constant, Increases, Increases

Constant, Decreases, Increases

Variable, Decreases, Increases

Variable, Decreases, Decreases

Taylor is about to go car shopping, and she has $5000 saved that she can use for a down payment while still having extra cash in her emergency fund. She expects the exact model car she’s looking for to cost $35,000. If her top priority is having the lowest monthly payments possible, which advice should she follow?

Put in $0 for your down payment, and choose a loan with a short term length

Put in $2500 for your down payment, and choose a loan with a short term length

Put in $3500 for your down payment, and choose a loan with a long term length

Put in $5000 for your down payment, and choose a loan with a long term length

Shira is trying to decide between getting a debit card, a prepaid debit card, and a credit card. Which statement is true?

All 3 cards are completely different

Debit cards and prepaid debit cards are the same

Debit cards and credit cards are the same

All 3 cards are completely the same

Credit card disclosure: "Your due date is at least 25 days after the end of the billing cycle. We will not charge you interest on new purchases provided that you have paid your previous balance in full by the due date each month." Identify the true statement.

If you make the minimum payment on your card within the 25 day period, the credit card company will not charge you interest

If you pay your previous balance in full after the due date, the credit card company will not charge you interest

25 days is an exceptionally long period without paying a credit card bill

The 25 days after the end of the billing cycle is referred to as the grace period

A loan with a shorter term length will have __________ monthly payments, and you will pay __________ in total interest.

higher, less

higher, more

lower, less

lower, more

10.

Select the statement below that accurately describes a characteristic of a credit card.

You owe the same payment every month

You must have money deposited into a checking account to use the credit card for purchases

Making full payments on-time every month is the only way to avoid interest charges

They do not charge interest

11.

Which of the following statements is CORRECT about secured loans?

They are a good choice to use for student loans

If the borrower does not make payments, the lender can repossess the item

In the event of default, the borrower loses nothing except for the down payment

They usually have higher interest rates as compared with unsecured loans

12.

An excellent credit score will help with which aspect of car financing?

Bargaining for a great sales price

Receiving a large down payment

Qualifying for a low interest rate

Having a wide selection of term lengths

13.

Which of these credit payback strategies would lead to the HIGHEST overall cost?

Paying off your credit card bill in full every month

Paying 20% of your credit card balance every month on time

Making the minimum payment (3% of your credit card balance) every month on time

Making the minimum payment (3% of your credit card balance) every month with an occasional late payment

14.

Duc has a credit card with a $1000 credit limit. His outstanding balance is currently $800. What is the maximum amount he can now spend on this credit card?

$200

$800

$1000

$1800

15.

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…

Reducing spending by canceling some of her streaming subscriptions

Taking extra shifts at work to increase her income

Making more than the minimum required payment on her debt

Applying for another credit card to use in case she runs out of cash paying off her debt

16.

How can your credit score impact your financial well-being?

Only consumers with high scores are approved for credit

Consumers with low scores get lower interest rates on loans than those with high scores

Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be

It generally has no impact on your financial situation

17.

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?

Over the five year period, Jasmere and Frank will pay the same amount for the car loan

Frank's monthly payment on the auto loan will be about $100 more than Jasmere's payment

Jasmere's monthly payment on the loan will be about $100 more than Frank's payment

Lenders are not allowed to charge people different interest rates based on their credit scores

18.

What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?

Snowball method

Make minimum payments

High rate method

Consolidate multiple debts into one new loan

19.

Who tracks all of your credit information?

Credit reporting agencies (Equifax, Experian and TransUnion)

Federal government

Consumer Financial Protection Board (CFPB)

Lenders

20.

Which of the following things should you have ready when contacting a credit reporting agency to report an error on your credit report?

Your preferred payment method to pay for fixing the error

A list of all of your financial accounts and balances

An explanation of the mistake and any evidence you have supporting your claim

References from a non-family member vouching for your creditworthiness

21.

Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?

Paying your bills on-time

Paying down balances on your credit card accounts

Decreasing your utilization of credit

Applying for multiple credit cards

22.

Which best describes the Debt Snowball method for paying off debt?

Only make payments on your smallest debt first, then move on to your second smallest debt, and so on

Once your debt "snowballs" out of control, hire a certified credit counselor to help get your finances back on track

Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the highest balance

Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance

23.

Which of these represents a potential consequence of neglecting to pay your federal student loans?

Wages or tax refunds can be garnished

Passport revocation

Driver’s license suspension

Termination from your job

24.

What benefits do you receive by taking out a loan with a cosigner?

You don’t get penalized for late payments

You get a discount on future loans after this one is paid off

You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit

You automatically get the same credit score as the cosigner once the loan is paid off

25.

Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ?

Accessing credit only becomes more expensive as you get older

Negative marks on your credit report go away faster for younger borrowers

Credit scores are free for anyone under the age of 25

You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card

26.

Review this partial credit report, and then choose the response below that accurately depicts the information on the report.

The borrower paid a $30 fee in February 2015

This borrower was never late with any of their credit payments

This borrower's most recent payment was $30

This borrower was 30 days late on their May 2015 payment

27.

The amount you can charge to a secured credit card is limited by…

Your credit score

The amount of money you deposit into an account as collateral

The total amount of money across all your bank accounts

How long you’ve had an account with the bank

28.

All of the following would show up on a credit report, EXCEPT...

Salary of your current job

Payment history of your car loan

Credit card payment history

Student loan activity

100 %

Credit Review

Total questions: 28

Worksheet time: 14mins

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