Financial Literacy - Unit 4_Credit and Loans

Question 1

A rating used by credit reporting agencies to help lenders decide if you the borrower is a high or low risk is known as:

Accepted Answer

credit score (FICO)

Question 2

A person's reputation for paying debt on time is known as:

Accepted Answer

character

Question 3

Stealing someone&#x27;s private identifying information and using it for financial gain is:

Accepted Answer

Identity theft

Question 4

A person&#x27;s ability to make a loan payment based on their income minus expenses is known as which C:

Accepted Answer

capacity

Question 5

How often can you receive a free credit report per year?

Accepted Answer

1

Question 6

The Credit CARD Act of 2009 imposted an initial fee cap of:

Accepted Answer

$25

Question 7

APR stands for:

Accepted Answer

Annual Percentage Rate

Question 8

The original amount of money borrowed is called the:

Accepted Answer

principal

Question 9

Amount of money you pay up front for something in order to reduce how much you put on credit is

Accepted Answer

down payment

Question 10

If you fail to repay your loan, you are in:

Accepted Answer

default

Question 11

The dollar amount that you pay in interest each billing period is known as:

Accepted Answer

Finance Charge

Question 12

If you fail to repay the loan, the creditor can take the secured asset from you. This is known as:

Accepted Answer

collateral

Question 13

This type of loan will require you put up a form of collateral:

Accepted Answer

secured loan

Question 14

Type of credit that has fixed payments and a set payoff date is (ex. car loan):

Accepted Answer

Installment

Question 15

When a person/business is unable to repay debts a legal proceducing can take place to help forgive the debit; known as:

Accepted Answer

Bankruptcy

Question 16

The person that signs a loan with someone else in which they will be responsible if you fail to

Accepted Answer

cosigner

Question 17

Which of the 4 Cs refers to the amount you own & have in savings:

Accepted Answer

Capital

Question 18

A person&#x27;s ability to make a loan payment based on their income & expenses:

Accepted Answer

capacity

Question 19

The action of taking possession of a mortgaged property when the borrower fails to pay is known as:

Accepted Answer

foreclosure

Question 20

The contract that comes with a credit card application is:

Accepted Answer

Credit Agreement

Question 21

The cost of using credit is called:

Accepted Answer

interest

Question 22

The original amount of money borrowed is known as:

Accepted Answer

principal

Question 23

All of the following are advantages of using credit EXCEPT which one:

Accepted Answer

paying interest

Question 24

A type of federal loan in which the borrower is responsible for interest from the time the money is disbursed (given):

Accepted Answer

unsubsidized loan

Question 25

If you fail to repay a loan; the creditor can take the item back. Which of the 4 Cs is this?

Accepted Answer

Collateral

Question 26

Which of the following is not a credit reporting agency:

Accepted Answer

Uni-Source

Financial Literacy - Unit 4_Credit and Loans

Questions 26

Financial Literacy - Unit 4_Credit and Loans

Questions 26