Question 1

Which of the following is the only online source authorized to provide you with a free copy of your credit report annually? Which of the following is the only online source authorized to provide you with a free copy of your credit report annually?

Accepted Answer

A)   www.annualcreditscore.com
B)   www.freecreditreport.com
C)   www.onlinecreditreport.com
D)   www.freecreditscore.com
E)   www.annualcreditreport.comF) C) and D)
G) A) and E)

Question 2

Most information in your credit file (except bankruptcies) may be reported for only 7 years.

Accepted Answer

A) True 
 B)False

Question 3

The longer the term for a loan at a given interest rate, the greater the amount you must pay in interest charges.

Accepted Answer

A) True 
 B)False

Question 4

A credit report includes

Accepted Answer

A)   Detailed credit information
B)   Bank statements
C)   All previous employers
D)   Credit card statements
E)   All of these.F) A) and B)
G) A) and C)

Question 5

You can lend money to micro-entrepreneurs through Kiva.org, a micro-lending website.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly crediting your payments?

Accepted Answer

A)   Experian Act of 1982
B)   Fair Credit Reporting Act of 2009
C)   Bills and Disputes Act of 1963
D)   Equifax Act of 1979
E)   Fair Credit Billing Act of 1975F) B) and D)
G) None of the above

Question 7

Sam is comparing the costs of two loans. One is due in one year and the other is due in four years. Both have the same stated rate of interest. Which of the following is true?

Accepted Answer

A)   The principal paid for the one-year loan will be lower than the principal paid for the four-year loan.
B)   The principal paid for the one-year loan will be higher than the principal paid for the four-year loan.
C)   The interest charges for the one-year loan will be lower than the interest charges for the four-year loan.
D)   The interest charges for the one-year loan will be higher than the interest charges for the four-year loan.
E)   The interest charges and principal payments cannot be compared for the two loans.F) B) and E)
G) None of the above

Question 8

Under Chapter 7 of the U.S. bankruptcy code,

Accepted Answer

A)   All debts are forgiven.
B)   Alimony and child support debts are released.
C)   Certain assets receive some protection.
D)   Certain debts arising from educational loans
E)   Debt arising from driving while intoxicated is forgiven.F) A) and B)
G) B) and E)

Question 9

Personal bankruptcy can be filed under which section(s)  of the U.S. bankruptcy code?

Accepted Answer

A)   Chapter 7
B)   Chapter 11
C)   Chapter 13
D)   Chapters 7 and 13
E)   Chapters 11 and 13F) C) and D)
G) B) and E)

Question 10

Consumer credit

Accepted Answer

A)   Is only a privilege of the affluent.
B)   Dates back to colonial times.
C)   Has been declining since the 1900s.
D)   Is not a major force in our economy.
E)   Is currently only used by farmersF) A) and C)
G) A) and B)

Question 11

A line of credit is

Accepted Answer

A)   The equal payments required for one-time loans.
B)   The loan amount for installment cash credit.
C)   The maximum loan amount for closed-end credit.
D)   The maximum dollar amount of credit the lender has made available to a borrower.
E)   The monthly payment required for single lump-sum credit.F) D) and E)
G) C) and E)

Question 12

Before taking out a loan, you should ask yourself whether you can meet all of your essential expenses and still afford the monthly loan payments. This can be determined by

Accepted Answer

A)   Adding up basic monthly expenses then adding this total to take-home pay.
B)   Asking what you plan to purchase with the loan
C)   Multiplying your take-home pay by 50% and subtracting your current loan payments.
D)   Adding up basic monthly expensesand subtracting this total from take-home pay, plus figuring out what to give up to make the monthly loan payment.
E)   None of the aboveF) A) and C)
G) D) and E)

Question 13

Installment sales credit is a loan that allows a consumer to purchase high-priced items such as large appliances or furniture.

Accepted Answer

A) True 
 B)False

Question 14

Carrie thought she misplaced her checkbook for a few days. When she found it, she noticed that two checks, her cash, and her debit card were missing. She immediately thought about the increase in identity theft in her area and decided to take some action. She should take all of the following steps except

Accepted Answer

A)   Stop payment on the missing checks.
B)   Cancel her debit card.
C)   Get a new debit card with a new personal identification number (PIN) .
D)   Close her bank account and open a new one.
E)   All of these steps are appropriate to take if she suspects identity theft.F) A) and C)
G) A) and B)

Question 15

In the five Cs of credit, character refers to the borrower's trustworthiness and stability.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a valid reason for using credit?

Accepted Answer

A)   Purchasing a car so a homemaker can return to work
B)   Borrowing for a college education
C)   Purchasing an item that costs less now than it will later
D)   Paying for a medical emergency
E)   All of these are valid reasons for borrowingF) All of the above
G) A) and E)

Question 17

Which of the following is an example of closed-end credit?

Accepted Answer

A)   A mortgage loan.
B)   A department store credit card.
C)   Overdraft protection.
D)   Travel and entertainment cards
E)   All of these are examples of closed-end credit.F) C) and D)
G) B) and E)

Question 18

If you have reached the upper limit of debt obligations, your debt-to-equity ratio is about

Accepted Answer

A)   0.
B)   0.2.
C)   0.25.
D)   0.5.
E)   1.F) A) and B)
G) All of the above

Question 19

If you are denied credit, you can contact the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your files within of notification that your credit application has been denied.

Accepted Answer

A)   10 days.
B)   20 days.
C)   30 days.
D)   60 days.
E)   90 days.F) A) and E)
G) D) and E)

Question 20

According to law, a creditor may threaten your credit rating while you are negotiating a billing dispute.

Accepted Answer

A) True 
 B)False

Exam 5: Consumer Credit: Advantages, Disadvantages, Sources, and Costs

In the five Cs of credit, character refers to the borrower's trustworthiness and stability.

Correct Answer
verified

Correct Answer
verified

Most information in your credit file (except bankruptcies) may be reported for only 7 years.

Correct Answer
verified

Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code?

Correct Answer
verified

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly crediting your payments?

Correct Answer
verified

The longer the term for a loan at a given interest rate, the greater the amount you must pay in interest charges.

Correct Answer
verified

You can lend money to micro-entrepreneurs through Kiva.org, a micro-lending website.

Correct Answer
verified

Which of the following is an example of closed-end credit?

Correct Answer
verified

Consumer credit

Correct Answer
verified

A credit report includes

Correct Answer
verified

A line of credit is

Correct Answer
verified

Installment sales credit is a loan that allows a consumer to purchase high-priced items such as large appliances or furniture.

Correct Answer
verified

Before taking out a loan, you should ask yourself whether you can meet all of your essential expenses and still afford the monthly loan payments. This can be determined by

Correct Answer
verified

Which of the following is a valid reason for using credit?

Correct Answer
verified

If you have reached the upper limit of debt obligations, your debt-to-equity ratio is about

Correct Answer
verified

If you are denied credit, you can contact the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your files within of notification that your credit application has been denied.

Correct Answer
verified

Under Chapter 7 of the U.S. bankruptcy code,

Correct Answer
verified

According to law, a creditor may threaten your credit rating while you are negotiating a billing dispute.

Correct Answer
verified

Sam is comparing the costs of two loans. One is due in one year and the other is due in four years. Both have the same stated rate of interest. Which of the following is true?

Correct Answer
verified

Which of the following is the only online source authorized to provide you with a free copy of your credit report annually? Which of the following is the only online source authorized to provide you with a free copy of your credit report annually?

Correct Answer
verified

Exam 5: Consumer Credit: Advantages, Disadvantages, Sources, and Costs

In the five Cs of credit, character refers to the borrower's trustworthiness and stability.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Most information in your credit file (except bankruptcies) may be reported for only 7 years.

Correct AnswerverifiedShow Answer

Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code?

Correct AnswerverifiedShow Answer

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly crediting your payments?

Correct AnswerverifiedShow Answer

The longer the term for a loan at a given interest rate, the greater the amount you must pay in interest charges.

Correct AnswerverifiedShow Answer

You can lend money to micro-entrepreneurs through Kiva.org, a micro-lending website.

Correct AnswerverifiedShow Answer

Which of the following is an example of closed-end credit?

Correct AnswerverifiedShow Answer

Consumer credit

Correct AnswerverifiedShow Answer

A credit report includes

Correct AnswerverifiedShow Answer

A line of credit is

Correct AnswerverifiedShow Answer

Installment sales credit is a loan that allows a consumer to purchase high-priced items such as large appliances or furniture.

Correct AnswerverifiedShow Answer

Before taking out a loan, you should ask yourself whether you can meet all of your essential expenses and still afford the monthly loan payments. This can be determined by

Correct AnswerverifiedShow Answer

Which of the following is a valid reason for using credit?

Correct AnswerverifiedShow Answer

If you have reached the upper limit of debt obligations, your debt-to-equity ratio is about

Correct AnswerverifiedShow Answer

If you are denied credit, you can contact the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your files within of notification that your credit application has been denied.

Correct AnswerverifiedShow Answer

Under Chapter 7 of the U.S. bankruptcy code,

Correct AnswerverifiedShow Answer

According to law, a creditor may threaten your credit rating while you are negotiating a billing dispute.

Correct AnswerverifiedShow Answer

Sam is comparing the costs of two loans. One is due in one year and the other is due in four years. Both have the same stated rate of interest. Which of the following is true?

Correct AnswerverifiedShow Answer

Which of the following is the only online source authorized to provide you with a free copy of your credit report annually? Which of the following is the only online source authorized to provide you with a free copy of your credit report annually?

Correct AnswerverifiedShow Answer

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