Question 1

In evaluating your credit application, a lender may

Accepted Answer

A)  ask your age.
B)  want to know if you are on public assistance.
C)  require your marriage certificate.
D)  ask if you are married or divorced.
E)  ask your race and nationality.F) A) and B)
G) A) and E)

Question 2

What is step three of the steps to resolve a billing dispute?

Accepted Answer

A)  Phone call
B)  Letter
C)  Other alternative
D)  Contact an ombudsman
E)  Contact a lawyerF) B) and D)
G) B) and C)

Question 3

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 4

Which of the following is not an example of a consumer loan?

Accepted Answer

A)  home mortgage
B)  automobile loan
C)  revolving credit
D)  debt consolidation installment loan
E)  demand loanF) B) and E)
G) All of the above

Question 5

If you have incorrect information in your credit file,

Accepted Answer

A)  you can't really do much about it.
B)  you have no legal remedies.
C)  credit bureaus are not required to change it.
D)  there are legal remedies available to you.
E)  don't worry much because you will still get the credit.F) B) and D)
G) None of the above

Question 6

Cobranding is the linking of a credit card with a business trade name offering "points" or premiums toward the purchase of a product or service.

Accepted Answer

A) True 
 B)False

Question 7

A valuable asset pledged to assure loan payments and subject to seizure upon default is called

Accepted Answer

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

Question 8

A common example of a consumer loan is:

Accepted Answer

A)  a credit card issued by a department store.
B)  a credit card issued by VISA or MasterCard.
C)  using overdraft protection at a bank.
D)  using a cashier's check to pay for a purchase.
E)  a mortgage loan.F) A) and C)
G) B) and D)

Question 9

There is always a transaction fee attached to make a cash advance.

Accepted Answer

A) True 
 B)False

Question 10

If your identity is stolen you should

Accepted Answer

A)  Contact the fraud departments of each of the two credit bureaus.
B)  Contact the creditors for any accounts that have been tampered with or opened fraudulently.
C)  File a police report
D)  Keep a copy of the police report
E)  Take all of the actions indicatedF) None of the above
G) B) and D)

Question 11

With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.

Accepted Answer

A) True 
 B)False

Question 12

By paying cash for a purchase, you

Accepted Answer

A)  forgo the opportunity to keep the cash in an interest-bearing account.
B)  always get a cash discount.
C)  can build a better credit rating.
D)  get better personal service from store employees.
E)  have a better selection of goods than if you use credit.F) B) and C)
G) B) and E)

Question 13

What percentage of your VantageScore is based on credit use?

Accepted Answer

A)  30%
B)  28%
C)  23%
D)  9%
E)  1%F) A) and B)
G) D) and E)

Question 14

A car loan is an example of a consumer loan.

Accepted Answer

A) True 
 B)False

Question 15

Which of these is not a true statement? To avoid online fraud, you should __________.

Accepted Answer

A)  keep your personal information private.
B)  review your monthly bank and credit card statements.
C)  give your password only to your internet service provider.
D)  use a secure browser.
E)  give payment information only to know known businesses.F) A) and B)
G) B) and E)

Question 16

What is step one of the steps to resolve a billing dispute?

Accepted Answer

A)  Phone call
B)  Letter
C)  Other alternative
D)  Contact an ombudsman
E)  Contact a lawyerF) All of the above
G) A) and B)

Question 17

Experts suggest that you spend no more than 20 percent of your net income on credit payments.(However, 15 percent is much better.)

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

Generally, most of the information in your credit file may be reported for only 3 years.

Accepted Answer

A) True 
 B)False

Question 20

If there is incorrect information in your credit file,

Accepted Answer

A)  you should sue the credit bureau.
B)  you must sue the merchant who denied the credit.
C)  the credit bureau must reinvestigate and modify or remove inaccurate data.
D)  pray that the credit bureau goes bankrupt.
E)  you cannot dispute the derogatory information.F) B) and C)
G) A) and D)

Exam 5: Introduction to Consumer Credit

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

Correct AnswerverifiedShow Answer

Experts suggest that you spend no more than 20 percent of your net income on credit payments.(However, 15 percent is much better.)

Correct AnswerverifiedShow Answer

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

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If you have incorrect information in your credit file,

Correct AnswerverifiedShow Answer

Cobranding is the linking of a credit card with a business trade name offering "points" or premiums toward the purchase of a product or service.

Correct AnswerverifiedShow Answer

Which of the following is not an example of a consumer loan?

Correct AnswerverifiedShow Answer

In evaluating your credit application, a lender may

Correct AnswerverifiedShow Answer

Generally, most of the information in your credit file may be reported for only 3 years.

Correct AnswerverifiedShow Answer

What is step three of the steps to resolve a billing dispute?

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What is step one of the steps to resolve a billing dispute?

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If there is incorrect information in your credit file,

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Which of these is not a true statement? To avoid online fraud, you should __________.

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A car loan is an example of a consumer loan.

Correct AnswerverifiedShow Answer

A common example of a consumer loan is:

Correct AnswerverifiedShow Answer

If your identity is stolen you should

Correct AnswerverifiedShow Answer

A valuable asset pledged to assure loan payments and subject to seizure upon default is called

Correct AnswerverifiedShow Answer

What percentage of your VantageScore is based on credit use?

Correct AnswerverifiedShow Answer

There is always a transaction fee attached to make a cash advance.

Correct AnswerverifiedShow Answer

By paying cash for a purchase, you

Correct AnswerverifiedShow Answer

With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.

Correct AnswerverifiedShow Answer

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