WorksheetsFinancial Terms and Credit Basics Quiz
Total questions: 35
Worksheet time: 20mins
What is an interest-bearing savings account?
An account that earns interest on the deposited money
An account that charges interest on withdrawals
An account with no interest
An account only for loans
What is credit?
The ability to borrow money or access goods or services with the understanding that you'll pay later
A type of savings account
A form of insurance
A type of investment
Who is a creditor?
A person or institution to whom money is owed
A person who borrows money
A person who saves money
A person who invests money
Who is a debtor?
A person who owes money
A person who lends money
A person who saves money
A person who manages money
What is consumer credit?
Credit extended to individuals for personal use
Credit given to businesses
Credit for government projects
Credit for international trade
What is a contract in financial terms?
A legally binding agreement between two or more parties
A type of loan
A savings account
A credit card
What is an acceleration clause?
A clause that allows a lender to demand full repayment if certain conditions are met
A clause that increases interest rates
A clause that extends the loan period
A clause that reduces monthly payments
What is a finance charge?
The total cost of borrowing, including interest and fees
The amount of money borrowed
The monthly payment
The down payment
What is a line of credit?
A preset amount of money a borrower can access as needed
A type of savings account
A one-time loan
A credit card only for businesses
Who is a cosigner?
A person who agrees to repay a loan if the borrower does not
A person who borrows money
A person who lends money
A person who manages a credit bureau
Which of the following is an example of a secured credit?
A car loan with the car as collateral
A credit card with no collateral
A personal loan with no collateral
A payday loan
Which of the following best describes an installment loan?
A loan paid back in regular payments over time
A loan paid back in one lump sum
A loan with no interest
A loan only for businesses
What is the main difference between secured and unsecured credit?
Secured credit requires collateral, unsecured credit does not
Unsecured credit requires collateral, secured credit does not
Secured credit is only for businesses
Unsecured credit has lower interest rates
What is a credit report?
A document that shows your borrowing and repayment history
A list of your monthly expenses
A summary of your job performance
A report on your physical health
Who is considered a low-risk borrower?
Someone who is likely to repay loans on time
Someone who never borrows money
Someone who always pays in cash
Someone who has no bank account
What does a credit score represent?
A number that indicates your creditworthiness
The amount of money in your savings account
The number of credit cards you own
The interest rate on your loan
Why is being a low-risk borrower important?
It helps you get loans at better interest rates
It increases your monthly expenses
It reduces your income
It makes you spend more money
If someone has a low credit score, what does it indicate?
They may have trouble repaying debts
They are very wealthy
They never use credit
They have a high income
Which of the following best describes a credit score?
A numerical summary of your creditworthiness
The number of credit cards you own
The amount of cash you have
The number of loans you have taken
How can someone improve their credit rating?
By making payments on time
By spending more money
By closing all bank accounts
By avoiding all loans
Which of the following is used by lenders to decide whether to give you a loan?
Credit report
Shopping list
Travel history
Social media profile
Which of the following is NOT a benefit of having a good credit rating?
Higher interest rates on loans
Easier loan approvals
Lower interest rates
Better credit card offers
If you miss several loan payments, what is likely to happen to your credit score?
It will decrease
It will increase
It will stay the same
It will not be affected
Which of the following is most likely to be found in a credit report?
List of your previous loans
Your favorite sports team
Your pet’s name
Your vacation plans
Why do banks check your credit rating before giving you a loan?
To assess your ability to repay the loan
To know your favorite color
To find out your hobbies
To check your travel history
Which of the following actions can negatively affect your credit score?
Missing loan payments
Paying bills on time
Keeping credit card balances low
Checking your credit report
What is the relationship between credit score and credit rating?
Both are used to evaluate creditworthiness
They are unrelated
Credit score is for banks, credit rating is for schools
Credit rating is only for businesses
What is the main difference between a credit score and a credit report?
Credit score is a number, credit report is a detailed history
Credit score is a letter, credit report is a number
Credit score is for businesses, credit report is for individuals
There is no difference
If you want to check your borrowing history, you should look at your:
Credit report
Shopping list
School report card
Social media profile
(a) a form on which you provide information needed by a lender to make a decision about granting credit.
(b) the percentage cost of credit on a yearly basis.
(c) the privilege of using someone else’s money for a period of time.
Match the following terms with their correct descriptions.
Cosigner - (a)
Creditor - (b)
Debtor - (c)
Cosigner
Creditor
Debtor
