Question 1

Robert Smith has monthly net income of $1,200.He has a house payment of $550 per month,a car loan with payments of $250 per month,a Visa card with payments of $40 per month,and a credit card with a local department store with payments of $58 per month.What is Robert's debt payments-to-income ratio?

Accepted Answer

A)  0%
B)  8%
C)  75%
D)  29%
E)  20%F) A) and B)
G) A) and C)

Question 2

What are the three most common types of closed-end credit?

Accepted Answer

The three most common types of...

Question 3

When imposters take your name,they are committing a crime.

Accepted Answer

A) True 
 B)False

Question 4

If you think that your bill is wrong,you should first:

Accepted Answer

A)  contact the local credit bureau and inform it of the billing error.
B)  complain to the Better Business Bureau.
C)  contact your state consumer protection agency.
D)  call the creditor to discuss the error.
E)  contact your attorney to settle the matter.F) A) and E)
G) A) and C)

Question 5

Installment cash credit is a:

Accepted Answer

A)  loan that must be repaid in total on a specified day.
B)  direct loan of money for personal purposes.
C)  loan that allows the consumer to receive merchandise,such as a refrigerator.
D)  down payment made on a purchase.
E)  synonym for single lump-sum credit.F) C) and D)
G) A) and C)

Question 6

Installment sales credit 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 large appliances or furniture.
D)  direct loan for vacation purposes.
E)  synonym for a single lump-sum credit.F) C) and D)
G) A) and E)

Question 7

Which one of the following would not be a good use of a home equity loan?

Accepted Answer

A)  Paying for a college education
B)  Buying a new boat
C)  Putting a new roof on your house
D)  Paying medical bills
E)  Adding a deck on the back of your houseF) D) and E)
G) A) and E)

Question 8

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Accepted Answer

A) True 
 B)False

Question 9

Which federal consumer credit law prohibits credit discrimination based on sex and marital status?

Accepted Answer

A)  Truth in Lending Act
B)  Fair Credit Reporting Act
C)  Fair Credit Billing Act
D)  Equal Credit Opportunity Act
E)  Fair Debt Collection Practices ActF) None of the above
G) B) and E)

Question 10

A home equity loan is based on the difference between the current market value of your home and the amount you still owe on your mortgage.

Accepted Answer

A) True 
 B)False

Question 11

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) B) and E)
G) B) and C)

Question 12

In the 5 Cs of credit,capital refers to your financial ability to meet credit obligations.

Accepted Answer

A) True 
 B)False

Question 13

The Consumer Financial Protection Bureau receives an average of how many complaints about the credit bureaus every year?

Accepted Answer

A)  5,000
B)  25,000
C)  36,000
D)  42,000
E)  50,000F) A) and B)
G) B) and D)

Question 14

In the 5 Cs of credit,collateral is an asset that you pledge to a financial institution to obtain a loan.

Accepted Answer

A) True 
 B)False

Question 15

Credit is an arrangement to receive cash,goods,or services now and pay for them in the future.

Accepted Answer

A) True 
 B)False

Question 16

If you have declared personal bankruptcy,then this fact may be reported by credit bureaus for ________ years.

Accepted Answer

A)  5
B)  10
C)  15
D)  20
E)  25F) D) and E)
G) A) and B)

Question 17

Installment cash credit is a direct loan of money for personal purposes,home improvements,or vacation expenses.

Accepted Answer

A) True 
 B)False

Question 18

The credit cardholders who pay off their balances in full each month are known as convenience users.

Accepted Answer

A) True 
 B)False

Question 19

One common type of closed-end credit is:

Accepted Answer

A)  a line of credit.
B)  convenience credit.
C)  revolving credit.
D)  installment cash credit.
E)  bank card credit.F) None of the above
G) A) and C)

Question 20

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

Accepted Answer

A) True 
 B)False

Exam 6: Introduction to Consumer Credit

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

Correct AnswerverifiedShow Answer

Which federal consumer credit law prohibits credit discrimination based on sex and marital status?

Correct AnswerverifiedShow Answer

The Consumer Financial Protection Bureau receives an average of how many complaints about the credit bureaus every year?

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,capital refers to your financial ability to meet credit obligations.

Correct AnswerverifiedShow Answer

Installment cash credit is a:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One common type of closed-end credit is:

Correct AnswerverifiedShow Answer

When imposters take your name,they are committing a crime.

Correct AnswerverifiedShow Answer

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Correct AnswerverifiedShow Answer

Installment cash credit is a direct loan of money for personal purposes,home improvements,or vacation expenses.

Correct AnswerverifiedShow Answer

Robert Smith has monthly net income of $1,200.He has a house payment of $550 per month,a car loan with payments of $250 per month,a Visa card with payments of $40 per month,and a credit card with a local department store with payments of $58 per month.What is Robert's debt payments-to-income ratio?

Correct AnswerverifiedShow Answer

If you think that your bill is wrong,you should first:

Correct AnswerverifiedShow Answer

Installment sales credit is a:

Correct AnswerverifiedShow Answer

A home equity loan is based on the difference between the current market value of your home and the amount you still owe on your mortgage.

Correct AnswerverifiedShow Answer

The credit cardholders who pay off their balances in full each month are known as convenience users.

Correct AnswerverifiedShow Answer

Which one of the following would not be a good use of a home equity loan?

Correct AnswerverifiedShow Answer

If you have declared personal bankruptcy,then this fact may be reported by credit bureaus for ________ years.

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,collateral is an asset that you pledge to a financial institution to obtain a loan.

Correct AnswerverifiedShow Answer

What are the three most common types of closed-end credit?

Correct AnswerverifiedThe three most common types of...View AnswerShow Answer

Credit is an arrangement to receive cash,goods,or services now and pay for them in the future.

Correct AnswerverifiedShow Answer

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The three most common types of...
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