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Intro to Credit (cards, loans, and scores)

Total questions: 52

Worksheet time: 26mins

Name
Class
Date
1.

What is a credit card?

a)

The ace of diamonds

b)

A large plastic card designed to ruin consumer's finances

c)

A small plastic card issued by the government attached to a line of credit

d)

A small plastic card issued by a bank and attached to a line of credit

2.

What is debt?

a)

Another word for death

b)

Something, typically money, that is owed or due

c)

A loan on which you do not have to pay interest

d)

That which is incurred during childhood and consummated in college

3.

What is a credit score?

a)

a number between 300 and 850 representing your creditworthiness

b)

a statistical number that evaluates a consumer's creditworthiness and is based on credit history.

c)

Often referred to as a FICO score

d)

All of the above

4.

What is an interest rate?

a)

it is your level of interest about a certain topic expressed as a percentage of your total interest

b)

The amount in terms of dollars that you have to pay back on a purchase

c)

it is the rate at which your interest in something expires. The higher the number, the quicker your interest expires

d)

The amount in terms of a rate or percentage that you have to pay back on an amount borrowed

5.

What is a credit report?

a)

A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness

b)

A detailed report of a bank's credit history prepared by a credit expert and used by consumers in determining a bank's creditworthiness

c)

A report which shows which credit cards are better than others

d)

A report invented by Allan Greenspan and credited to Al Gore

6.

The process of collecting funds that are owed and past due is called...

a)

gathering

b)

dollar collecting

c)

overdrafting

d)

collections

7.

What is bankruptcy?

a)

A point in time where everything a person owns has been given to charity

b)

A legal proceeding involving a person or business that is unable to repay outstanding debts in which the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt

c)

When a bank is built on top of a volcano and the volcano erupts causing a bank(e)ruptcy

d)

A legal proceeding involving a person or business that is more than capable of repaying outstanding debts in which all of the debtor's assets are measured and evaluated, and then given away to those in need

8.

When I apply to borrow money for a car, the loan company will most likely look at my credit history.

a)

True

b)

False

9.

I should review my credit report for errors.

a)

True

b)

False

10.

A credit report contains my personal information such as my address and social security.

a)

True

b)

False

11.

Late payments are retained on credit reports for 7 years.

a)

True

b)

False

12.

Which of the following is TRUE about a credit report?

a)

It is a complete history of one type of credit you have

b)

Credit reports are maintained by the 5 main credit bureaus

c)

You can get a copy of your credit report for free

d)

You can get a credit report only when you're 21 years old

13.

Which of the following is one of the 3 nationally recognized credit bureaus?

a)

Equifax

b)

Federal Reserve

c)

Postal Credit

d)

TripleUnion

14.

Your credit score is not configured off of which of the following:

a)

Payment history

b)

Amount of money owed

c)

Grades in School

d)

Length of credit history

15.

Which is an exceptional credit score?

a)

672

b)

555

c)

713

d)

813

16.

My credit history does not affect my chances for renting my first apartment.

a)

True

b)

False

17.

To build a positive credit history, I should pay cash for all purchases.

a)

True

b)

False

18.

a number assigned to a person that indicates to lenders their capacity to repay a loan.

a)

Credit score

b)

Credit report

c)

Credit history

d)

Credit bureau

19.

Numerous credit applications in a short period of time.

a)

Positive Impact

b)

Negative Impact

20.

The most common credit scoring system is called the

a)

FCO

b)

FECO

c)

FISO

d)

FICO

21.

The credit score ranges form 

a)

300-800

b)

250-950

c)

350-900

d)

300-850

22.

What happens when you don't have enough money to pay for the things you charged?

a)

You end up owing less than the original amount of money you charged.

b)

You end up owing more than the original amount of money you charged.

c)

You end up owing the same amount of money you charged, it just takes a while to pay off.

23.

What is one advantage of having a credit card?

a)

It prevents you from spending more than you earn.

b)

It allows you to make purchases without carrying lots of cash.

c)

It encourages you to budget your money wisely.

d)

It helps you pay off debts that you may have.

24.

Why would your credit provider give you a credit limit?

a)

To remind you to pay your bill on time.

b)

To prevent you from enjoying the things you buy.

c)

To prevent you from spending more money than you can pay back.

d)

To prevent you from shopping in certain places.

25.

How do credit card companies make money?

a)

By charging late fees and interest to their customers.

b)

By making you pay an extra dollar on every purchase.

c)

By charging late fees and interest to stores and other businesses.

d)

By earning interest on the money they have saved up.

26.

Easy credit can entice people to make purchases they can't pay off. What does "entice" mean?

a)

prevent

b)

remind

c)

force

d)

lure

27.

How is charging a purchase like getting a loan?

a)

You borrow money from your credit provider.

b)

You borrow money from the store in order to pay your credit provider.

c)

You borrow money from an ATM in order to pay your credit provider.

28.

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

29.

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

30.

A cosigner on a loan can help by:

a)

Reducing monthly payments

b)

False

c)

Boosting approval odds

d)

Offering collateral for the loan

31.

Which of the following does NOT contribute to your credit score?

a)

Your payment history

b)

Which banks issued your credit cards

c)

Your debt-to-credit ratio

d)

Length of credit history

32.

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

33.

Which of the following is TRUE about finding errors on your credit report?

a)

You may have to file a dispute with each credit bureau

b)

You should wait until the end of the month before reporting

c)

Finding errors is common & is not a big deal

d)

Overlooked errors may result in you paying a fine

34.

Where can you get a free copy of your credit report?

a)

annualcreditreport.com

b)

freecreditreport.com

c)

getmycreditreport.com

d)

creditreport.gov

35.

Using the debt snowball method, you make...

a)

minimum payments on all of your loans

b)

one large payment on one loan

c)

minimum payments on small loans; pay extra on large loans

d)

minimum payments on large loans; pay extra on small loans

36.

Using the Avalanche Method, you...

a)

pay off all your loans in the least amount of time

b)

put extra money towards loans with the lowest interest rate

c)

put extra money towards loans with the highest interest rate

d)

make one large payment on the loan with the highest rate

37.

Which types of debt usually CANNOT be erased or reduced?

a)

Federal student loans

b)

Credit card debt

c)

Medical bills

d)

None of these types of debt can be erased or reduced

38.

What can debt collectors do if you don't make payments towards your loans?

a)

Have you arrested if you owe money

b)

They can try contacting you at work

c)

Call you between 8am-9pm to talk to you about your loans

d)

Reach out to your friends about the debt you owe

39.

What information can you find on a credit report?

a)

Your medical insurance information

b)

Your parents' and siblings' contact information

c)

Your education level

d)

Inquiries you've made on new lines of credit

40.

Is a loan that does not have collateral pledged against it.

a)

Closed-end Credit

b)

Secured Loan

c)

Open-end Credit

d)

Unsecured Loan

41.

Is a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.

a)

Loan

b)

Debt

c)

Credit

d)

Collateral

42.

Is a loan in which the borrower pledges some asset as collateral.

a)

Closed-end Credit

b)

Secured Loan

c)

Open-end Credit

d)

Unsecured Loan

43.

The total amount of money owed lenders or creditors.

a)

Loan

b)

Debt

c)

Credit

d)

Collateral

44.

There is not a set payoff date for the credit.

a)

Closed-end Credit

b)

Secured Loan

c)

Open-end Credit

d)

Unsecured Loan

45.

The annual rate of interest that is charged for using credit

a)

APR

b)

Fixed Rate

c)

Variable Rate

d)

Finance Charge

46.

Amount of money borrowed.

a)

Revolving Credit

b)

Principal

c)

Installment Credit

d)

Term

47.

Is the dollar amount it costs to use a credit card.

a)

APR

b)

Fixed Rate

c)

Variable Rate

d)

Finance Charge

48.

The amount of time you have to pay the loan back.

a)

Revolving Credit

b)

Term

c)

Installment Credit

d)

Repossession

49.

The cost to borrow money which has to be paid.

a)

Revolving Credit

b)

Interest

c)

Principal

d)

Term

50.

Failure to pay back a loan.

a)

Default

b)

Interest

c)

Principal

d)

Repossession

51.

A person who agrees to pay a borrower's debt if he or she defaults on the loan.

a)

Borrower

b)

Lender

c)

Joint Applicant

d)

Co-signer

52.

There is a set payoff date for the credit.

a)

Closed-end Credit

b)

Secured Loan

c)

Open-end Credit

d)

Unsecured Loan