WorksheetsNGPF Exam Review: Managing Your Credit & Types of Credit
Total questions: 46
Worksheet time: 23mins
What is credit? Fill in the blank: Credit is ________ now and paying it back later, usually with interest.
spending money
borrowing money
saving money
earning money
Why does credit matter?
It impacts insurance rates
It determines your salary
Employers may check credit during hiring
It affects approvals for cars, apartments, houses, loans, and credit cards
Which of the following is an example of installment credit?
Charge card
Car loan
Credit card
Utility bill
Which type of credit allows you to borrow up to a limit and the balance can change monthly?
Charge Card
Revolving Credit
Installment Credit
Service Credit
Service credit is when you pay for services after you use them.
False
True
A credit score is a 3-digit number (300–850) that shows your likelihood of ________ borrowed money.
withdrawing
repaying
spending
losing
Why does having a good credit score matter? (Select more than one answer.)
Lower insurance costs
Lower interest rates
None of the above
More rental opportunities
Easier loan approvals
Fill in the blank: The largest factor in a FICO score is _________.
Credit Utilization
Payment History
New Credit Inquiries
Length of Credit History
What percentage of your FICO score is determined by Payment History?
15%
35%
10%
30%
Amounts Owed (including credit utilization) makes up what percentage of a FICO score?
35%
30%
10%
15%
New Credit makes up 10% of your FICO score.
False
True
Which of the following is a tip for managing credit wisely?
Keep credit card balances under 30% of their limit
All of the above
Always pay on time
Avoid opening multiple new accounts quickly
You should check your credit report yearly.
False
True
Fill in the blank: You should pay ______ than the minimum on your credit card.
equal
more
none
less
Which of the following is NOT included in a credit report?
B) List of all open and closed credit accounts
D) Favorite color
C) Payment history
A) Personal information
Fill in the blank: Late payments, collections, and bankruptcies are included in your _________.
paycheck
credit report
tax return
bank statement
Where can you get your credit report?
CreditReportOnline.net
AnnualCreditReport.com
FreeCreditScore.org
MyCreditCheck.com
What is the yearly cost of borrowing money, including interest and fees called?
Credit Limit
APR (Annual Percentage Rate)
Minimum Payment
Principal Balance
What percent of your credit limit should you stay under when using your credit card?
90%
30%
50%
70%
What is the smallest amount to pay on a credit card each month called?
Annual Fee
Minimum Payment
Credit Limit
Interest Charge
Credit requiring collateral, such as a car or deposit, is called what?
Installment Credit
Secured Credit
Unsecured Credit
Revolving Credit
Credit with no collateral, approval based on credit history, is called what?
Installment Credit
Unsecured Credit
Secured Credit
Revolving Credit
A lender’s detailed credit check that can lower your score slightly is called a:
Credit Report
Hard Inquiry
Credit Freeze
Soft Inquiry
A basic credit check that does NOT affect your score is called a:
Credit Freeze
Soft Inquiry
Credit Report
Hard Inquiry
The time (usually 21–30 days) when you can pay your bill with no interest is called:
Billing Cycle
Grace Period
Statement Date
Late Fee Period
A person who agrees to pay your debt if you don’t is called a:
Guarantor
Co-signer
Lender
Borrower
What is the maximum amount you can borrow on a revolving account called?
Outstanding Balance
Credit Limit
Minimum Payment
Interest Rate
A missed payment or past-due account is called:
Collateral
Delinquency
Equity
Amortization
Failure to repay a loan for a long period, which may lead to collections, is called:
Collateral
Default
Refinance
Amortization
The amount of money originally borrowed is called:
Revenue
Principal
Interest
Dividend
The time you have to repay a loan is called:
Penalty
Term
Principal
Interest
Credit Score: ________ (Fill in the blank with the definition)
A government-issued identification number.
Three-digit number predicting repayment likelihood.
A type of bank account for daily transactions.
A document used to apply for a loan.
Credit Report: ________ (Fill in the blank with the definition)
A report of your academic achievements.
A detailed record of your credit history.
A summary of your employment history.
A list of your monthly expenses.
Revolving Credit: ________ (Fill in the blank with the definition)
Credit that requires collateral for approval.
Borrow up to a limit; balance changes monthly.
A loan that must be repaid in fixed installments.
A type of credit used only for mortgages.
Installment Credit: ________ (Fill in the blank with the definition)
A loan with no repayment schedule.
Fixed monthly payments for a set period.
A one-time payment for a purchase.
Credit that must be paid in full each month.
Service Credit: ________ (Fill in the blank with the definition)
Credit for advance payments made.
Credit for services used and paid for later.
Credit for goods returned to the supplier.
Credit for cash payments only.
Credit Mix: ________ (Fill in the blank with the definition)
The number of credit inquiries on your report.
Variety of types of credit you have.
The length of your credit history.
The total amount of credit available to you.
New Credit: ________ (Fill in the blank with the definition)
The length of your credit history.
New accounts or credit applications.
Your payment history.
The total amount of debt owed.
Amounts Owed: ________ (Fill in the blank with the definition)
Your payment history on loans.
How much debt you have, including credit utilization.
Your total income from all sources.
The number of credit accounts you own.
Length of Credit History: ________ (Fill in the blank with the definition)
The number of credit inquiries on your report.
How long your credit accounts have been open.
Your current credit score.
The total amount of debt you owe.
Fixed Rate: ________ (Fill in the blank with the definition)
Loan amount increases over time.
Interest rate stays the same for the full loan term.
Only applies to short-term loans.
Interest rate changes every month.
Variable Rate: ________ (Fill in the blank with the definition)
Interest rate is determined by the borrower.
Interest rate can change with market conditions.
Interest rate is fixed for the entire term.
Interest rate is always higher than fixed rate.
The factor that has the greatest impact on your FICO score is:
New credit inquiries
Payment history
Types of credit used
Length of credit history
Revolving credit is different from installment credit in that:
revolving credit is always interest-free, while installment credit charges interest
revolving credit allows repeated borrowing up to a limit, while installment credit is repaid in fixed payments
installment credit can be used repeatedly, while revolving credit is for one-time purchases
revolving credit requires collateral, while installment credit does not
Paying only the minimum payment on credit cards is dangerous because:
It immediately improves your credit score.
It leads to higher interest charges and longer repayment periods.
It allows you to pay off your balance faster.
It eliminates all future fees.
Three consequences of having a low credit score are:
Lower interest rates, easy loan approval, and better insurance rates.
Higher interest rates, difficulty getting loans, and trouble renting an apartment.
More job offers, higher credit limits, and lower deposits.
Easier access to credit, lower monthly payments, and more rewards.
