Question 1

With closed-end credit,loans are made on a continuous basis and you make at least a partial payment each billing period.

Accepted Answer

A) True 
 B)False

Question 2

If you have a problem with your creditor,the best solution is to:

Accepted Answer

A)  file a lawsuit against the creditor.
B)  solve your problem directly with the creditor.
C)  complain to the Federal Reserve System.
D)  complain to the Board of Governors.
E)  wait for creditor action.F) B) and D)
G) B) and E)

Question 3

The Fair Credit Reporting Act regulates the use of credit reports,requires the deletion of obsolete information,and gives consumers access to their files.

Accepted Answer

A) True 
 B)False

Question 4

In the 5 Cs of credit,capital refers to your assets or net worth.

Accepted Answer

A) True 
 B)False

Question 5

Charles Rickman is applying for a loan from the bank.The bank has determined that he has never been late making payments on past loans.Which of the 5 Cs of credit is the bank looking at?

Accepted Answer

A)  character
B)  capacity
C)  capital
D)  collateral
E)  conditionsF) B) and C)
G) All of the above

Question 6

A bank that is looking at your past payment records on your loans is most likely examining which aspect of the 5 Cs of lending?

Accepted Answer

A)  character
B)  capacity
C)  collateral
D)  capital
E)  conditionsF) A) and E)
G) C) and D)

Question 7

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) All of the above
G) B) and D)

Question 8

Larry Arnold gets a direct loan of money to go on vacation with his family.He will repay the loan over the next twelve months.What type of credit did Larry use?

Accepted Answer

A)  installment sales credit
B)  installment cash credit
C)  single lump sum credit
D)  revolving credit
E)  incidental creditF) A) and D)
G) C) and D)

Question 9

Karen is notified by her credit card company that the credit limit on her credit card has just been increased to $10,000.This is one example of a change related to

Accepted Answer

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

Question 10

Which federal law protects you by requiring credit bureaus to furnish correct and complete information to creditors?

Accepted Answer

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

Question 11

Mohammad Ishaque has checked his credit report and believes there is an error in it.Which consumer protection law specifies that he has the right to have errors in his credit report investigated?

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) A) and E)
G) C) and D)

Question 12

Experts suggest that you spend no more than ____________ percent of your net income on credit purchases.

Accepted Answer

A)  10
B)  20
C)  30
D)  40
E)  50F) B) and E)
G) A) and C)

Question 13

The debt-to-equity ratio is calculated by dividing your monthly debt payments (not including house payments)by your net worth.

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

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 16

Consumer credit:

Accepted Answer

A)  is a privilege of the affluent.
B)  dates back to colonial times.
C)  carries no finance charge.
D)  is not a major force in our economy.
E)  use has been declining in recent years.F) A) and B)
G) B) and E)

Question 17

If you have declared personal bankruptcy,that fact may be reported by credit bureaus for ____________ years.

Accepted Answer

A)  5
B)  10
C)  15
D)  20
E)  25F) All of the above
G) A) and C)

Question 18

If you cosign,the creditor can collect this debt from you without first trying to collect from the borrower.

Accepted Answer

A) True 
 B)False

Question 19

A term that refers to the borrower's assets or net worth is called:

Accepted Answer

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

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 6: Introduction to Consumer Credit

If you have declared personal bankruptcy,that 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

A bank that is looking at your past payment records on your loans is most likely examining which aspect of the 5 Cs of lending?

Correct AnswerverifiedShow Answer

A term that refers to the borrower's assets or net worth is called:

Correct AnswerverifiedShow Answer

With closed-end credit,loans are made on a continuous basis and you make at least a partial payment each billing period.

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,capital refers to your assets or net worth.

Correct AnswerverifiedShow Answer

Which federal law protects you by requiring credit bureaus to furnish correct and complete information to creditors?

Correct AnswerverifiedShow Answer

If you have a problem with your creditor,the best solution is to:

Correct AnswerverifiedShow Answer

Larry Arnold gets a direct loan of money to go on vacation with his family.He will repay the loan over the next twelve months.What type of credit did Larry use?

Correct AnswerverifiedShow Answer

Consumer credit:

Correct AnswerverifiedShow Answer

The Fair Credit Reporting Act regulates the use of credit reports,requires the deletion of obsolete information,and gives consumers access to their files.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The debt-to-equity ratio is calculated by dividing your monthly debt payments (not including house payments)by your net worth.

Correct AnswerverifiedShow Answer

Most of the information in your credit file may be reported for only ______ years.

Correct AnswerverifiedShow Answer

Charles Rickman is applying for a loan from the bank.The bank has determined that he has never been late making payments on past loans.Which of the 5 Cs of credit is the bank looking at?

Correct AnswerverifiedShow Answer

If you cosign,the creditor can collect this debt from you without first trying to collect from the borrower.

Correct AnswerverifiedShow Answer

Mohammad Ishaque has checked his credit report and believes there is an error in it.Which consumer protection law specifies that he has the right to have errors in his credit report investigated?

Correct AnswerverifiedShow Answer

Experts suggest that you spend no more than ____________ percent of your net income on credit purchases.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Karen is notified by her credit card company that the credit limit on her credit card has just been increased to $10,000.This is one example of a change related to

Correct AnswerverifiedShow Answer

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