NEW
Font size
S
M
L
XL
WorksheetsCredit & Insurance Unit Test Review
Total questions: 75
Worksheet time: 38mins
Name
Class
Date
1.
Which financial tool gives you immediate purchasing power without cash?
a)
Loan
b)
Debit card
c)
Credit card
d)
Checkbook
2.
What is the function of a credit limit?
a)
Shows your savings
b)
Sets your income level
c)
Caps how much you can borrow
d)
Controls interest rates
3.
What document summarizes your credit history?
a)
Loan contract
b)
Credit score
c)
Credit report
d)
Bank slip
4.
Which of the following will help build a good credit history?
a)
Missing payments
b)
Using credit responsibly
c)
Ignoring statements
d)
Defaulting often
5.
What is the typical consequence of declaring bankruptcy?
a)
Improved credit score
b)
Debt forgiveness and credit damage
c)
Higher salary
d)
Loan approval
6.
What is a key risk of using credit cards?
a)
Lower interest rates
b)
Debt accumulation
c)
High savings
d)
Improved budget
7.
What happens if you miss a credit card payment?
a)
Nothing
b)
Your credit improves
c)
You build savings
d)
You may pay a late fee and hurt your score
8.
A line of credit allows repeated borrowing within a limit.
a)
True
b)
False
9.
What does a higher credit score typically indicate?
a)
Lower credit risk
b)
Higher income
c)
More spending
d)
Older age
10.
Line of credit allows you to:
a)
Avoid repayments
b)
Access a fixed amount of credit over time
c)
Get money for free
d)
Withdraw unlimited cash
11.
Defaulting on a loan may result in:
a)
Improved interest rates
b)
Higher credit score
c)
Asset repossession
d)
Lower taxes
12.
You should never check your credit report.
a)
True
b)
False
13.
What is a credit report?
a)
A list of purchases
b)
Your tax summary
c)
Record of credit activity
d)
Bank account details
14.
One danger of misusing credit is:
a)
High savings
b)
Bank bonuses
c)
Long-term debt
d)
Increased income
15.
What is a credit score primarily used for?
a)
Determining income
b)
Evaluating employment
c)
Assessing creditworthiness
d)
Setting tax rates
16.
Which of the following typically affects your credit score the most?
a)
Length of credit history
b)
Payment history
c)
Number of friends
d)
Employment history
17.
Why might a person apply for a personal loan?
a)
To fund retirement
b)
To buy groceries
c)
For emergencies or vacations
d)
To avoid taxes
18.
Which of the following is a feature of a credit card?
a)
Earns monthly salary
b)
Charges annual fee only
c)
Allows borrowing up to a limit
d)
Requires no repayment
19.
A credit score only matters when applying for a job.
a)
True
b)
False
20.
Having no credit history can impact your ability to get a loan.
a)
True
b)
False
21.
Credit card debt can be avoided by:
a)
Paying only the minimum balance
b)
Using multiple cards
c)
Paying full balance monthly
d)
Not checking statements
22.
Which type of loan is typically used to buy a home?
a)
Auto loan
b)
Mortgage
c)
Student loan
d)
Credit loan
23.
What is one purpose of insurance?
a)
To avoid taxes
b)
To invest money
c)
To protect against financial loss
d)
To earn credit
24.
Which loan is most likely used for tuition?
a)
Auto loan
b)
Personal loan
c)
Student loan
d)
Mortgage
25.
What is the best strategy to avoid credit card debt?
a)
Use multiple cards
b)
Pay minimum only
c)
Avoid budgeting
d)
Pay balance in full monthly
26.
Predatory lending is a safe and ethical practice.
a)
True
b)
False
27.
Which loan type is used for buying a vehicle?
a)
Personal loan
b)
Student loan
c)
Auto loan
d)
Business loan
28.
Which of the following best defines a loan?
a)
A donation from a bank
b)
Money borrowed and paid back with interest
c)
Money given as a gift
d)
Taxable income
29.
What does APR stand for?
a)
Annual Payment Rate
b)
Adjusted Payment Ratio
c)
Annual Percentage Rate
d)
Average Payment Rate
30.
Which financial term represents the total interest on a loan annually?
a)
ROI
b)
APY
c)
APR
d)
ETF
31.
What is one benefit of using credit responsibly?
a)
No interest charged
b)
Lower future loan rates
c)
Unlimited borrowing
d)
Faster taxes
32.
A fixed interest rate means:
a)
The rate never changes
b)
The rate changes weekly
c)
The rate is based on inflation
d)
The bank can alter it daily
33.
What does a mortgage loan help you buy?
a)
A car
b)
A house
c)
A vacation
d)
Groceries
34.
Which of these is NOT a type of loan?
a)
Student loan
b)
Auto loan
c)
Mortgage
d)
Payroll tax
35.
Which of these is considered a predatory lending practice?
a)
Low interest loans
b)
Reasonable repayment terms
c)
Hidden fees and high interest
d)
Transparent terms
36.
What increases your debt-to-income ratio?
a)
Higher salary
b)
More debt
c)
Lower debt
d)
Less income
37.
Student loans are a form of consumer credit.
a)
True
b)
False
38.
How can credit reports be accessed?
a)
Only by employers
b)
Only by friends
c)
Through credit bureaus
d)
At the DMV
39.
Why are credit cards considered convenient?
a)
They pay your bills automatically
b)
They don't require repayment
c)
They allow quick transactions
d)
They save income
40.
A high interest rate means:
a)
Lower borrowing cost
b)
Higher borrowing cost
c)
Less borrowing
d)
Free credit
41.
Making late payments can negatively affect your credit score.
a)
True
b)
False
42.
Which organization introduced the first universal credit card?
a)
Visa
b)
MasterCard
c)
Diners Club
d)
Bank of America
43.
Which of these would help you understand your credit behavior?
a)
Bank statement
b)
Credit report
c)
Insurance policy
d)
Tax return
44.
What can damage your credit score?
a)
Paying bills on time
b)
Defaulting on loans
c)
Having a savings account
d)
Depositing checks
45.
Why is understanding loans important?
a)
To avoid taxes
b)
To skip payments
c)
To make informed financial decisions
d)
To lower credit score
46.
Credit cards became more common in what decade?
a)
1920s
b)
1950s
c)
1970s
d)
1990s
47.
What is credit?
a)
Borrowed money to be paid back later
b)
A type of insurance
c)
A savings account
d)
An investment strategy
48.
Which of the following is a common use of credit?
a)
Paying for groceries
b)
Buying a house
c)
Purchasing stocks
d)
Donating to charity
49.
What is a credit score?
a)
Your income level
b)
A number representing your creditworthiness
c)
Your bank account balance
d)
The number of loans you have
50.
Which is an example of revolving credit?
a)
Mortgage
b)
Car loan
c)
Credit card
d)
Student loan
51.
What does APR stand for?
a)
Annual Premium Rate
b)
Adjusted Payment Return
c)
Annual Percentage Rate
d)
Authorized Payment Rate
52.
A lower credit score usually results in:
a)
Lower interest rates
b)
Higher interest rates
c)
More loan offers
d)
Better credit terms
53.
Which is a warning sign of predatory lending?
a)
Clear repayment terms
b)
Reasonable interest rates
c)
Hidden fees
d)
Licensed lender
54.
Which strategy involves paying off the smallest debts first?
a)
Avalanche method
b)
Snowball method
c)
Stacking method
d)
Interest method
55.
Bankruptcy can negatively affect your credit score for how many years?
a)
2 years
b)
5 years
c)
7-10 years
d)
15 years
56.
Which of these does not affect your credit score?
a)
Payment history
b)
Credit mix
c)
Age
d)
Credit utilization
57.
A line of credit is:
a)
A one-time loan
b)
A fixed deposit
c)
An open-ended loan up to a limit
d)
An investment account
58.
What is the main benefit of a high credit score?
a)
More taxes
b)
Lower insurance premiums
c)
Better borrowing terms
d)
More savings account options
59.
Predatory creditors often target:
a)
People with excellent credit
b)
Students with full scholarships
c)
Financially vulnerable individuals
d)
Investors
60.
Debt consolidation helps by:
a)
Increasing interest rates
b)
Combining multiple debts into one
c)
Reducing income
d)
Spending more
61.
Which of the following is a secured loan?
a)
Credit card
b)
Personal loan
c)
Mortgage
d)
Student loan
62.
What is a credit report?
a)
A financial forecast
b)
A list of your debts
c)
A history of your credit usage
d)
An insurance policy
63.
What is a key feature of credit cards?
a)
Fixed loan amount
b)
Earns interest
c)
Revolving credit
d)
Requires collateral
64.
What is one way to build credit?
a)
Avoiding all loans
b)
Using a credit card responsibly
c)
Only using cash
d)
Declaring bankruptcy
65.
Which of the following is NOT a benefit of good credit?
a)
Lower interest rates
b)
Higher approval chances
c)
Longer loan terms
d)
Guaranteed stock returns
66.
Which method prioritizes paying off high-interest debt?
a)
Snowball
b)
Lump sum
c)
Avalanche
d)
Payment freeze
67.
What does a credit utilization ratio represent?
a)
Percentage of credit used vs available
b)
Your income-to-loan ratio
c)
Number of credit cards owned
d)
Your loan repayment term
68.
Timely payments help improve your credit score.
a)
True
b)
False
69.
Bankruptcy removes all responsibility to repay debts.
a)
True
b)
False
70.
A credit score over 700 is generally considered good.
a)
True
b)
False
71.
All credit cards charge interest.
a)
True
b)
False
72.
You should always pay only the minimum balance on credit cards.
a)
True
b)
False
73.
Checking your own credit report hurts your score.
a)
True
b)
False
74.
Secured loans require collateral.
a)
True
b)
False
75.
A high credit utilization ratio can hurt your score.
a)
True
b)
False
Reset
