Question 1

Which of the following is a credit bureau?

Accepted Answer

A)  Federal Reserve
B)  Federal Trade Commission
C)  Better Business Bureau
D)  Experian
E)  FICOF) A) and C)
G) A) and D)

Question 2

Which of the following is a prearranged loan for a specified amount that you can use by writing a special check?

Accepted Answer

A)  incidental credit.
B)  closed-end credit.
C)  a bank line of credit.
D)  installment sales credit.
E)  overdraft protection.F) All of the above
G) A) and C) C

Question 3

Today,Michael purchased a laptop computer from a retail outlet.He has agreed to pay for this purchase in full 30 days from today.This is an example of:

Accepted Answer

A)  open-end credit.
B)  a line of credit.
C)  single lump-sum credit.
D)  installment cash credit.
E)  incidental credit.F) None of the above
G) C) and D)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 6

Your friends and neighbors can get credit information about you.

Accepted Answer

A) True 
 B)False

Question 7

A credit arrangement that has no extra costs and no specific repayment plan is called:

Accepted Answer

A)  installment sales credit.
B)  single lump-sum credit.
C)  line of credit.
D)  incidental credit.
E)  revolving check credit.F) D) and E)
G) All of the above

Question 8

Which of the following is true of the baby boom generation?

Accepted Answer

A)  represents about 30% of the population
B)  holds nearly 60% of the outstanding debt
C)  extensively uses debt
D)  born between 1946 and 1964
E)  all of theseF) B) and D)
G) C) and E)

Question 9

An example of open-end credit is:

Accepted Answer

A)  the use of a bank credit card to make a purchase.
B)  a mortgage loan from a savings and loan institution.
C)  an automobile loan from a credit union.
D)  an installment loan from a furniture store.
E)  an installment loan for purchasing a major appliance.F) C) and E)
G) A) and C) A

Question 10

The debt payments-to-income ratio is calculated by dividing your total liabilities by your net worth.

Accepted Answer

A) True 
 B)False

Question 11

Which federal consumer credit law starts all credit applicants off on the same footing with factors that may not be used to discriminate against you?

Accepted Answer

A)  Fair Credit Reporting Act
B)  Truth in Lending Act
C)  Fair Credit Billing Act
D)  Fair Debt Collection Practices Act
E)  Equal Credit Opportunity ActF) A) and E)
G) A) and C)

Question 12

In the 5 Cs of credit,capacity refers to the borrower's attitude toward his or her credit obligations.

Accepted Answer

A) True 
 B)False

Question 13

The best way to maintain your credit rating is to:

Accepted Answer

A)  use credit sparingly.
B)  pay cash for your purchases.
C)  repay your debts on time.
D)  declare a Chapter 7 bankruptcy.
E)  use as many credit cards as you can.F) A) and B)
G) C) and D)

Question 14

Which federal consumer credit law requires credit-reporting agencies to send the consumer's version of a disputed item to certain businesses or creditors?

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

Question 15

Jake Skinner purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days.What type of credit did Jake use?

Accepted Answer

A)  Installment sales credit
B)  Installment cash credit
C)  Single lump-sum credit
D)  Revolving credit
E)  Incidental creditF) A) and B)
G) D) and E)

Question 16

A debit card:

Accepted Answer

A)  immediately deducts the cost of your purchase from your bank account.
B)  credits your account at the moment you buy goods or services.
C)  is a new type of a credit card issued by VISA International.
D)  is another name for a travel and entertainment card.
E)  typically has a credit limit of $1,000.F) B) and D)
G) B) and C) A

Question 17

The accuracy of credit reports has worsened recently.

Accepted Answer

A) True 
 B)False

Question 18

What are the two general rules of measuring credit capacity?

Accepted Answer

The two general rules of measuring credi...

Question 19

Which one of the following is not included in the 5 C's of credit?

Accepted Answer

A)  Conditions
B)  Cash flow
C)  Collateral
D)  Capacity
E)  CharacterF) B) and C)
G) A) and D)

Question 20

Which federal consumer credit law requires "credit repair" companies to give consumers a written contract that can be canceled within three business days?

Accepted Answer

A)  Fair and Accurate Credit Transactions Act
B)  Fair Debt Collection Practices Act
C)  Fair Credit Billing Act
D)  Truth in Lending Act
E)  Consumer Credit Reporting Reform ActF) B) and C)
G) C) and D)

Exam 6: Introduction to Consumer Credit

Which of the following is a credit bureau?

Correct AnswerverifiedShow Answer

Which of the following is a prearranged loan for a specified amount that you can use by writing a special check?

Correct AnswerverifiedC

Today,Michael purchased a laptop computer from a retail outlet.He has agreed to pay for this purchase in full 30 days from today.This is an example of:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Your friends and neighbors can get credit information about you.

Correct AnswerverifiedShow Answer

A credit arrangement that has no extra costs and no specific repayment plan is called:

Correct AnswerverifiedShow Answer

Which of the following is true of the baby boom generation?

Correct AnswerverifiedShow Answer

An example of open-end credit is:

Correct AnswerverifiedA

The debt payments-to-income ratio is calculated by dividing your total liabilities by your net worth.

Correct AnswerverifiedShow Answer

Which federal consumer credit law starts all credit applicants off on the same footing with factors that may not be used to discriminate against you?

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,capacity refers to the borrower's attitude toward his or her credit obligations.

Correct AnswerverifiedShow Answer

The best way to maintain your credit rating is to:

Correct AnswerverifiedShow Answer

Which federal consumer credit law requires credit-reporting agencies to send the consumer's version of a disputed item to certain businesses or creditors?

Correct AnswerverifiedShow Answer

Jake Skinner purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days.What type of credit did Jake use?

Correct AnswerverifiedShow Answer

A debit card:

Correct AnswerverifiedA

The accuracy of credit reports has worsened recently.

Correct AnswerverifiedShow Answer

What are the two general rules of measuring credit capacity?

Correct AnswerverifiedThe two general rules of measuring credi...View AnswerShow Answer

Which one of the following is not included in the 5 C's of credit?

Correct AnswerverifiedShow Answer

Which federal consumer credit law requires "credit repair" companies to give consumers a written contract that can be canceled within three business days?

Correct AnswerverifiedShow Answer

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The two general rules of measuring credi...
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