Question 1

Which consumer credit law prohibits creditors from requiring women to reapply for credit upon a change in marital status?

Accepted Answer

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

Question 2

What can you do if your identity is stolen?

Accepted Answer

The answer of What can you do if your identity...

Question 3

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) None of the above
G) C) and D)

Question 4

If you want to improve your credit score you should:

Accepted Answer

A)   get copies of your credit report.
B)   pay your bills on time.
C)   make sure you understand how your credit score is determined.
D)   beware of credit-repair scams.
E)   do all of these things.F) A) and B)
G) C) and D)

Question 5

The Federal Trade Commission receives more consumer complaints about credit bureaus than about any other industry.

Accepted Answer

A) True 
 B)False

Question 6

Using a credit card, such as Visa or MasterCard, is an example of closed-end credit.

Accepted Answer

A) True 
 B)False

Question 7

Which federal law requires creditors to inform applicants of acceptance or rejection of their credit application within 30 days of receiving a completed application?

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

Question 8

Which one of the following agencies can produce for a subscribing member, almost instantaneously, a report about your past and present credit activity?

Accepted Answer

A)   Federal Reserve Bank in your district
B)   Consumer sentinel network
C)   Federal Trade Commission
D)   Public assistance office
E)   Credit bureauF) A) and C)
G) C) and D)

Question 9

Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals.

Accepted Answer

A) True 
 B)False

Question 10

If your credit application is denied, you:

Accepted Answer

A)   should sue the credit rating agency.
B)   should file a complaint against the merchant.
C)   have no legal right to know why.
D)   are entitled to know the specific reason you were denied credit.
E)   can reapply for credit after 30 days.F) None of the above
G) A) and B)

Question 11

According to a recent survey, what percent of U.S. households carry one or more credit cards?

Accepted Answer

A)   40
B)   60
C)   75
D)   80
E)   90F) All of the above
G) D) and E)

Question 12

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

Question 13

Which one of the following is an advantage of using credit?

Accepted Answer

A)   Potential bankruptcy
B)   Spending beyond your budget
C)   Funding an emergency expense
D)   Committing future income to pay for current purchases
E)   Incurring interest chargesF) D) and E)
G) A) and E)

Question 14

Karen Price has determined that her net worth is $30,000, excluding her home. She owes $80,000 on her mortgage and $15,000 on a car loan. What is Karen's debt-to-equity ratio?

Accepted Answer

A)   3.2
B)   2.0
C)   0.5
D)   2.7
E)   0.3F) B) and E)
G) A) and D)

Question 15

Approximately how many credit card users would be classified as "convenience users" who generally pay off their balances in full each month?

Accepted Answer

A)   20%
B)   33%
C)   45%
D)   50%
E)   70%F) D) and E)
G) B) and D)

Question 16

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

Accepted Answer

The answer of What are the three most common types...

Question 17

If you cosign a loan:

Accepted Answer

A)   you are only responsible for half of the debt obligation.
B)   you will be asked, but not required, to pay the loan if full if the borrower fails to pay.
C)   you will be required to pay the loan in full if the borrower defaults on the payments.
D)   the creditor must first try to collect from the borrower.
E)   the creditor is prohibited from garnishing your wages if you refuse to pay the loan in full.F) A) and B)
G) C) and D)

Question 18

Mortgage loans, automobile loans, and installment loans for purchasing furniture or appliances are examples of:

Accepted Answer

A)   a line of credit.
B)   a credit card loan.
C)   open-end credit.
D)   closed-end credit.
E)   convenience credit.F) B) and D)
G) B) and C)

Question 19

What should you do when you shop on-line using your credit card?

Accepted Answer

A)   Delete immediately all records of your transactions
B)   Use a secure browser
C)   Give out your private information to anyone who requests it on-line
D)   Make sure to open and download all files sent you by strangers
E)   Give your password to anyone who requests itF) C) and D)
G) A) and C)

Question 20

What is revolving check credit?

Accepted Answer

The answer of What is revolving check credit?...

Exam 6: Introduction to Consumer Credit

Installment cash credit is a:

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According to a recent survey, what percent of U.S. households carry one or more credit cards?

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Which consumer credit law prohibits creditors from requiring women to reapply for credit upon a change in marital status?

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Which one of the following is an advantage of using credit?

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What can you do if your identity is stolen?

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Which one of the following agencies can produce for a subscribing member, almost instantaneously, a report about your past and present credit activity?

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Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals.

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Mortgage loans, automobile loans, and installment loans for purchasing furniture or appliances are examples of:

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If you want to improve your credit score you should:

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

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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

What should you do when you shop on-line using your credit card?

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Approximately how many credit card users would be classified as "convenience users" who generally pay off their balances in full each month?

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If your credit application is denied, you:

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Karen Price has determined that her net worth is $30,000, excluding her home. She owes $80,000 on her mortgage and $15,000 on a car loan. What is Karen's debt-to-equity ratio?

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If you cosign a loan:

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What is revolving check credit?

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Using a credit card, such as Visa or MasterCard, is an example of closed-end credit.

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Which federal law requires creditors to inform applicants of acceptance or rejection of their credit application within 30 days of receiving a completed application?

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The Federal Trade Commission receives more consumer complaints about credit bureaus than about any other industry.

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