Question 1

Which of the following is the best rating to have on your credit report?

Accepted Answer

A)  L0
B)  L10
C)  R0
D)  R1
E)  R9F) D) and E)
G) A) and B)

Question 2

The borrower's financial ability to meet credit obligations is called

Accepted Answer

A)  capacity.
B)  character.
C)  capital.
D)  collateral.
E)  conditions.F) A) and B)
G) A) and C)

Question 3

A line of credit is the maximum dollar amount of credit the lender has made available to you.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is the worst possible rating to have on your credit report?

Accepted Answer

A)  L0
B)  L10
C)  R0
D)  R1
E)  R9F) B) and C)
G) A) and E)

Question 5

What percentage of your VantageScore is based on available credit?

Accepted Answer

A)  30%
B)  28%
C)  23%
D)  9%
E)  1%F) B) and D)
G) A) and D)

Question 6

Credit should not be considered a substitute for cash.

Accepted Answer

A) True 
 B)False

Question 7

If you cosign a loan, all of the following are true except,

Accepted Answer

A)  you are being asked to guarantee the debt.
B)  it is your legal responsibility to pay the debt.
C)  you'll have to pay only a portion of the debt if the borrower does not pay.
D)  the creditor must first try to collect from the borrower.
E)  the creditor can garnish your wages.F) D) and E)
G) A) and E)

Question 8

An installment loan is a

Accepted Answer

A)  direct loan of money for personal purposes.
B)  direct loan of money for home improvement.
C)  loan that allows you to receive merchandise such as a refrigerator or furniture.
D)  direct loan for vacation purposes.
E)  synonym for a single lump-sum credit.F) B) and C)
G) A) and C)

Question 9

What percentage of your VantageScore is based on credit balances?

Accepted Answer

A)  30%
B)  28%
C)  23%
D)  9%
E)  1%F) All of the above
G) A) and E)

Question 10

Generally, most of the information in your credit file may be reported for only ______ years.

Accepted Answer

A)  7
B)  9
C)  11
D)  13
E)  15F) A) and B)
G) A) and C)

Question 11

Some studies show that as many as three out of four cosigners are asked to repay the loan.

Accepted Answer

A) True 
 B)False

Question 12

The borrower's attitude toward his or her credit obligations is called

Accepted Answer

A)  capacity.
B)  capital.
C)  character.
D)  collateral.
E)  conditions.F) None of the above
G) A) and B)

Question 13

It is safer to use credit, since charge accounts and credit cards let you shop and travel without carrying large amounts of cash.

Accepted Answer

A) True 
 B)False

Question 14

When did installment credit explode on the North American scene?

Accepted Answer

A)  Just after World War II
B)  with the advent of television in the late 1940s
C)  with the advent of the automobile in the early 1900s
D)  during the recession of the 1950s
E)  during the inflation of the 1970sF) C) and D)
G) A) and D)

Question 15

Which of these is a characteristic of Paypal?

Accepted Answer

A)  Facilitates online auction payments.
B)  Offers password protected accounts.
C)  Allows use of credit cards.
D)  Transfers funds in U.S.dollars.
E)  All are characteristics of PaypalF) A) and B)
G) A) and C)

Question 16

A lender requires a cosigner even when a borrower meets the lender's criteria for making a loan.

Accepted Answer

A) True 
 B)False

Question 17

A credit card cash withdrawal always incurs interest from the moment of withdrawal.

Accepted Answer

A) True 
 B)False

Question 18

Valid reasons for using credit include all of the following except

Accepted Answer

A)  medical emergency
B)  acquiring a car to return to the workforce
C)  borrowing for a higher education
D)  borrow for everyday living expenses
E)  buying an item now will cost less than in the futureF) D) and E)
G) B) and E)

Question 19

The maximum amount of credit you are allowed by a creditor is called a(n)

Accepted Answer

A)  revolving credit.
B)  installment cash credit.
C)  convenience credit.
D)  line of credit.
E)  single lump-sum credit.F) B) and C)
G) A) and D)

Question 20

What percentage of consumers are rated prime plus based on the VantageScore?

Accepted Answer

A)  16%
B)  20%
C)  25%
D)  9%
E)  19%F) A) and C)
G) A) and B)

Exam 5: Introduction to Consumer Credit

Generally, most of the information in your credit file may be reported for only ______ years.

Correct AnswerverifiedShow Answer

If you cosign a loan, all of the following are true except,

Correct AnswerverifiedShow Answer

Valid reasons for using credit include all of the following except

Correct AnswerverifiedShow Answer

When did installment credit explode on the North American scene?

Correct AnswerverifiedShow Answer

It is safer to use credit, since charge accounts and credit cards let you shop and travel without carrying large amounts of cash.

Correct AnswerverifiedShow Answer

The borrower's financial ability to meet credit obligations is called

Correct AnswerverifiedShow Answer

Credit should not be considered a substitute for cash.

Correct AnswerverifiedShow Answer

The borrower's attitude toward his or her credit obligations is called

Correct AnswerverifiedShow Answer

A line of credit is the maximum dollar amount of credit the lender has made available to you.

Correct AnswerverifiedShow Answer

The maximum amount of credit you are allowed by a creditor is called a(n)

Correct AnswerverifiedShow Answer

What percentage of your VantageScore is based on available credit?

Correct AnswerverifiedShow Answer

What percentage of your VantageScore is based on credit balances?

Correct AnswerverifiedShow Answer

Which of the following is the best rating to have on your credit report?

Correct AnswerverifiedShow Answer

Some studies show that as many as three out of four cosigners are asked to repay the loan.

Correct AnswerverifiedShow Answer

A lender requires a cosigner even when a borrower meets the lender's criteria for making a loan.

Correct AnswerverifiedShow Answer

An installment loan is a

Correct AnswerverifiedShow Answer

Which of the following is the worst possible rating to have on your credit report?

Correct AnswerverifiedShow Answer

Which of these is a characteristic of Paypal?

Correct AnswerverifiedShow Answer

What percentage of consumers are rated prime plus based on the VantageScore?

Correct AnswerverifiedShow Answer

A credit card cash withdrawal always incurs interest from the moment of withdrawal.

Correct AnswerverifiedShow Answer

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