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A review of credit for the Wise financial literacy test.
Flashcards
29 cards
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Practice quiz
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Host live
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Questions
29
Answers
1
Which of the following would most likely increase your interest rate?
Amount charged
Number of charges
Number of cash advances
Late payments
2
A bankruptcy will stay on a person's record for how long?
Forever
10 years
3 years
Until all debts are paid
3
If you declare bankruptcy, you must still pay:
Credit card bills
Child support
Tax bills and student loans
Mortgage loans
4
To qualify for a Federal Housing Administration home loan you must:
Have a 25% downpayment
Have at least a high school diploma
Meet certain income requirements
Provide two co-signers
5
Redlining occurs when:
You are denied credit based on where you live
You are denied credit based on ethnicity
You are denied credit based on credit score
You are denied credit based on age
6
When car loan shopping, you should compare the cost of the loan as a percentage. This is the:
Credit insurance percentage
Finance charge percentage
Finance Charge
APR or Annual Percentage Rate
7
You can continue to charge on your credit card if:
Your last payment was on time
You can afford the monthly payment
Your balance is over your credit limit
The balance is below your credit limit
8
What is the lowest possible amount that you can pay on your credit card bill?
Minimum payment
Principal payment
Late payment fee
Finance charge
9
Which of the following lenders charge the highest interest rates?
Finance companies
Pawn shops
Banks
Credit unions
10
If you fail to repay a debt and there was a co-signer on the loan, then:
The debt is written off, but credit score is reduced
The co-signer will be responsible for loan, fees, penalties
Co-signer can renegotiate loan
Co-signer will have a note appear on credit report only
11
Which of the following is "open-ended" or "revolving" credit?
Mortgage
Car loan
Installment loan
Department store charge card
12
Predatory lending includes all EXCEPT:
Affordable fees and interest
Lender expects you to refinance when you can't make payments
Lenders agreeing to refinance without looking at your credit
Harrassing phone calls and misinformation
13
If you have a car loan that will be paid off in 4 years, you have:
Installment loan
An unsecured loan
Balloon-payment loan
Non-installment loan
14
Consumer Credit Counseling Services offers:
Stocks and bonds
Insurance policies
Debt counseling and repayment plans
Retirement planning advice
15
A credit card finance charge is:
The cost of credit in terms of a dollar amount
The cost of credit expressed as a percentage
The cost of items purchased
A service fee
16
If you mail your credit card payment on the due date it is:
Late and fees will be imposed
On time if it is received within a week of the due date
Late but no late fees will be imposed
Considered on time if postmarked by the due date
17
Most victims of predatory lending are:
Financially literate individuals
Wealthy individuals
People with very good credit
The elderly and people with poor credit
18
When you need to dispose of an old credit card, you should:
Recycle it
Throw it in a garbage can
Mail it back to the credit card company
Cut the card up and put the pieces in different trash cans
19
Abel graduated from high school and wants to establish good credit. What's a good first step?
Take out a credit card and make the minimum payments
Borrow money from friends and relatives
Getting a loan with a co-signer and have them repay the loan
Get a credit card with a low limit, pay it off each month
20
A husband and wife have credit cards with both their names. They divorce. Who is responsible?
Neither
The husband
The primary breadwinner
Both
21
If you have denied a job, loan because of bad credit, you can get a free credit report within:
60 days
30 days
90 days
1 year
22
If you cannot afford to make the minimum payment on your credit card bill, you should FIRST:
Call the IRS
Declare bankruptcy
Contact the credit reporting agencies
Call the credit card company to see what options you have
23
What is an
un
collateralized loan?
A personal loan without assets to back it
A loan taken out on a whole life insurance policy
Home equity loan
A loan with a co-signer
24
How will credit cards that you do not use affect your credit score?
If it's department store cards, it has no effect
They have no affect
They will improve your credit score
They will reduce your credit score (it's potential debt)
25
How can you best protect yourself against credit card fraud?
Call the credit card company periodically
Don't give any credit card information when you are called
Do not use your credit card at department stores
Don't give any personal info when applying for a credit card
26
A credit score is:
A formula based on income
A number used to determine creditworthiness or risk
A reward system for borrowers
A formula based on net wealth
27
When you bring in something to a pawn shop, it is a:
Installment credit
Collateralized loan
Unsecured loan
A sales agreement
28
Collateral is:
Something that explains your net worth
Not required for any loan
An asset that helps secure a loan
A form of credit
29
What is the best way to improve a bad credit score?
Make the minimum payment each month
Pay bills on time & in full
Apply for more credit
Open a checking account
