WorksheetsCredit Evaluation Quiz
Total questions: 24
Worksheet time: 12mins
What does "Capital" in the context of credit refer to?
A large sum of money in the bank
An asset of value that can be taken by lenders if the loan isn't repaid
The total amount of money borrowed
The interest rate of a loan
What is a lender's chief concern under the category of "Capacity" when evaluating a loan application?
The applicant's educational background
The applicant's credit score
Whether the applicant is able to repay the loan
The number of previous loans the applicant has
How does a lender interpret an applicant's "Character" in the credit evaluation process?
By assessing the applicant's personal references
By considering the applicant's criminal record
By reviewing the applicant's history of paying bills on time
By interviewing the applicant's employers
What percentage of a credit score is determined by payment history according to the image?
10%
15%
30%
35%
Which factor contributes 30% to the calculation of a credit score?
Credit Mix
Amount Owed
Length of Credit History
New Accounts
What is the impact of having too many accounts open on your credit score?
It increases the score by 10%
It may lower the score
It increases the score by 15%
It has no effect on the score
What does the 'Length of Credit History' factor contribute to your credit score?
10%
15%
30%
35%
What credit score range is typically considered "Excellent" according to the credit score chart?
600-700
700-800
800-850
500-600
Which of the following statements is true for a person with a credit score in the "Very Good" range?
They will only be eligible for secured loans.
They can expect the lowest possible interest rates and best terms.
They are not eligible for most loans.
They will be eligible for most loans with good rates.
If someone's credit score falls in the "Poor" category, what type of loans are they primarily eligible for?
Unsecured loans with high interest rates
Secured loans only
Most loans with average rates
No loans are available
According to the image, which FICO® Score range is considered 'Very Good'?
670-739
740-799
800-850
580-669
Which of the following is NOT one of the three major credit bureaus?
Experian
Equifax
TransUnion
CreditSuisse
What can potential landlords request to assess if they should rent a property to someone?
Permission to review your employment history
Permission to review your credit report
Permission to review your educational background
Permission to review your medical records
How might a poor credit score affect your ability to set up utilities when moving to a new place?
It may not affect at all
It may reduce the cost of utilities
It may prevent you from setting up utilities
It may require a higher security deposit
What is the relationship between credit scores and property insurance rates?
Higher credit scores lead to lower rates
Lower credit scores have no impact on rates
Credit scores are unrelated to property insurance rates
Higher credit scores lead to higher rates
What do auto insurance companies use to determine their rates?
A standard credit score
A version of a score based on driving history
A version of a score based on on-time payments
A version of a score based on age and gender
Which legislation allows the use of credit reports by government agencies to regulate certain professions?
Consumer Credit Protection Act
Fair Credit Reporting Act
Credit Repair Organizations Act
Equal Credit Opportunity Act
How can a poor credit score impact your ability to start a business?
Increases tax liabilities
Limits access to necessary capital
Reduces business knowledge
None of the above
What is one way a young person aged 18-21 can start building credit according to the image?
Open a savings account
Get a job
Have a parent act as a co-signer to open a credit card account
Purchase a car
What is required to obtain a secured credit card?
A high credit score
A cash deposit as collateral
A recommendation letter
A full-time job
What does it mean to "tag onto another credit card" as a way to build credit?
To open a new credit card account
To steal someone's credit card information
To be added as an authorized user on a parent's credit card account
To pay off another person's credit card debt
What is the primary advantage of using the High Rate strategy to tackle debt?
It allows for smaller monthly payments.
It extends the term of the loan.
It results in paying less interest and potentially paying off the debt quicker.
It consolidates multiple debts into one.
What does the Debt Snowball strategy primarily focus on?
Paying off the debt with the highest interest rate first.
Paying off the smallest debts first to build motivation.
Consolidating all debts into a single payment.
Extending the payment period of debts.
What are the 3 C's of Credit
Capital
Character
Credit
Character
Capital
Capacity
Credit
Card
Car
Capacity
Credit
College
