Free Printable Managing Credit- Unit Test

Worksheets

Managing Credit- Unit Test

Total questions: 28

Worksheet time: 56mins

Name

Class

Date

1. What are the two most important factors in calculating your credit score?

Payment history and types of accounts

Amounts owed and length of credit history

Payment history and total debt

Length of credit history and new credit inquiries

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…

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

3. 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

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?

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

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?

Snowball method

Make minimum payments

High rate method

Consolidate multiple debts into one new loan

6. Who tracks all of your credit information?

Credit reporting agencies (Equifax, Experian and TransUnion)

Federal government

Consumer Financial Protection Board (CFPB)

Lenders

7. 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

8. 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

9. 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

10.

10. 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

11.

11. 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

12.

12. 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

13.

13. 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

14.

14.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

15.

15. 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

16.

People who obtain loans from payday loan stores, title loan offices, or pawn shops are most likely -

consumers with low credit scores unable to obtain a bank loan

employed individuals eligible for job promotions

students using their scholarships as collateral

people afraid of losing their Social Security benefits by borrowing from a bank

17.

A creditor determines a person's creditworthiness based on the person's

address

gender, age, and health

education

character, collateral, and capacity

18.

FICO Credit Scores consist of:

credit profile, marital status, total assets, job income

credit history and debt ratio

Amt owed, New Credit, Length of Credit History, Credit Mix, Payment History

Income and how much you have in the bank

19.

An "Excellent" Credit Score is in the range of:

300-579

750-850

900-999

600-749

20.

The most critical factor in a FICO score (35%) is:

Credit Mix

Credit Ratio

New Credit

Payment History

21.

The highest FICO score possible is:

1600

1000

850

700

22.

If your credit score is low (choose all that are correct)

you will pay higher finance charges (interest)

you may not be approved for loans

you look better to lenders

you will pay lower finance charges (interest)

23.

Your credit score will always be the same for all three credit bureaus.

true

false

24.

In your credit score, "payment history" refers to

if you pay your bills on time

how much you owe in relation to how much credit you have (are you "maxed out")

length of time you have used credit

what type of loans you have ("good" vs "bad" loans)

25.

Too many "inquiries" (lenders requesting your credit score when you apply for a loan) can lower your score.

true

false

26.

Identify whether each piece of information is included in a credit report or not.

Categorize the following

Car loan

Missed payments on a loan

Birthday

Number of credit cards

Number of debit cards

Medical history

bank account balance

Religion

Social Security Number

Included in a Credit Report

NOT Included in a Credit Report

27.

What type of accounts do you see on the credit report? (select all that apply)

Auto

Apartment

Home

Vacation

Boat

28.

Which of the following would require the information on a credit report? Check all that apply.

You have $1000 to buy a computer that costs $2000 at Best Buy, so you apply for a Best Buy Credit card

You have $1000 to buy a car that costs $5000 and your parents loan you the rest.

You have a part time job and want to deposit your money in a bank account and pay your bills with online banking

You want to rent an apartment when you go to college

100 %

Managing Credit- Unit Test

Total questions: 28

Worksheet time: 56mins

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