Question 1

How do creditors determine your credit-worthiness?

Accepted Answer

Creditors determine your credit-worthine...

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

Question 3

Which federal law requires credit-reporting agencies to send the consumer's version of a disputed item to certain businesses and 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) All of the above
G) C) and D)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Jennifer Rogers needs a loan to purchase a new car. She knows the creditor must:

Accepted Answer

A)   ask about how many children she plans on having.
B)   consider whether she has a telephone in her own name.
C)   evaluate her on the same basis as applicants who are male.
D)   require her husband to cosign the loan.
E)   ask about her birth control methods.F) D) and E)
G) A) and B)

Question 6

Which federal credit law protects you against an unauthorized use of your credit card?

Accepted Answer

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

Question 7

What can be included in your credit report?

Accepted Answer

A)   Race
B)   Nationality
C)   Sex
D)   Marital status
E)   ReligionF) D) and E)
G) C) and E)

Question 8

When you cosign a loan, you are being asked to guarantee this debt.

Accepted Answer

A) True 
 B)False

Question 9

Which federal law regulates the use of credit reports, requires the deletion of obsolete information, and gives you access to your file?

Accepted Answer

A)   Truth in Lending Act of 1969
B)   Fair Credit Billing Act of 1975
C)   Equal Credit Opportunity Act of 1975
D)   Fair Credit Reporting Act of 1971
E)   Fair Debit Collection Practices Act of 1978F) A) and D)
G) A) and B)

Question 10

The baby boom generation currently represents about 30 percent of the population but holds nearly ____________ percent of the debt outstanding.

Accepted Answer

A)   80
B)   70
C)   60
D)   50
E)   40F) B) and C)
G) B) and E)

Question 11

Describe the federal law that protects you from billing mistakes.

Accepted Answer

The answer of Describe the federal law that protects you...

Question 12

If your debit card is lost or stolen, you must work directly with the issuer.

Accepted Answer

A) True 
 B)False

Question 13

Amy Farmer is getting a loan to buy a used car. The bank wants to know the trade-in value of the car she is purchasing. Which of the 5 Cs of credit is the bank examining?

Accepted Answer

A)   Character
B)   Capacity
C)   Capital
D)   Collateral
E)   ConditionsF) A) and D)
G) B) and D)

Question 14

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)   notify the creditor in writing within 60 days after the bill was mailed.
E)   contact your attorney to settle the matter.F) A) and C)
G) A) and D)

Question 15

If you have a complaint about consumer credit, you should first:

Accepted Answer

A)   try to solve your problem directly with the creditor.
B)   contact your attorney.
C)   file a complaint with the Better Business Bureau.
D)   report it to the state consumer protection agency.
E)   complain to the Federal Reserve Bank in your district.F) All of the above
G) A) and D)

Question 16

A loan officer is examining your income and the amount of your existing debt payments in deciding whether to make a loan to you today. Which aspect of the 5 Cs of lending is the loan officer most likely looking at?

Accepted Answer

A)   Character
B)   Capacity
C)   Capital
D)   Collateral
E)   ConditionsF) C) and E)
G) A) and C)

Question 17

A home equity loan is usually set up as a revolving line of credit, typically with a variable interest rate.

Accepted Answer

A) True 
 B)False

Question 18

Credit bureaus obtain their data from banks, finance companies, merchants, credit card companies, other creditors, and court records.

Accepted Answer

A) True 
 B)False

Question 19

Single lump-sum credit is a loan that must be repaid in total on a specified day, usually within 30 to 90 days.

Accepted Answer

A) True 
 B)False

Question 20

Which consumer credit law prohibits abusive, deceptive, and unfair practices by debt collectors?

Accepted Answer

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

Exam 6: Introduction to Consumer Credit

A loan officer is examining your income and the amount of your existing debt payments in deciding whether to make a loan to you today. Which aspect of the 5 Cs of lending is the loan officer most likely looking at?

Correct AnswerverifiedShow Answer

Jennifer Rogers needs a loan to purchase a new car. She knows the creditor must:

Correct AnswerverifiedShow Answer

What can be included in your credit report?

Correct AnswerverifiedShow Answer

Which consumer credit law prohibits abusive, deceptive, and unfair practices by debt collectors?

Correct AnswerverifiedShow Answer

How do creditors determine your credit-worthiness?

Correct AnswerAnswered by ExamLex AICreditors determine your credit-worthine...View AnswerShow Answer

A home equity loan is usually set up as a revolving line of credit, typically with a variable interest rate.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If your debit card is lost or stolen, you must work directly with the issuer.

Correct AnswerverifiedShow Answer

If you have a complaint about consumer credit, you should first:

Correct AnswerverifiedShow Answer

Which federal law regulates the use of credit reports, requires the deletion of obsolete information, and gives you access to your file?

Correct AnswerverifiedShow Answer

Single lump-sum credit is a loan that must be repaid in total on a specified day, usually within 30 to 90 days.

Correct AnswerverifiedShow Answer

When you cosign a loan, you are being asked to guarantee this debt.

Correct AnswerverifiedShow Answer

The baby boom generation currently represents about 30 percent of the population but holds nearly ____________ percent of the debt outstanding.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Describe the federal law that protects you from billing mistakes.

Correct AnswerverifiedShow Answer

Credit bureaus obtain their data from banks, finance companies, merchants, credit card companies, other creditors, and court records.

Correct AnswerverifiedShow Answer

Amy Farmer is getting a loan to buy a used car. The bank wants to know the trade-in value of the car she is purchasing. Which of the 5 Cs of credit is the bank examining?

Correct AnswerverifiedShow Answer

Which federal credit law protects you against an unauthorized use of your credit card?

Correct AnswerverifiedShow Answer

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Creditors determine your credit-worthine...
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