Question 1

What is the term for the price of using someone else’s money?

Accepted Answer

Interest

Answer

Investment

Answer

Profit

Answer

Principal

Question 2

What 4 letter acronym begins a credit score?

Accepted Answer

FICO

Answer

AMEX

Answer

VISA

Answer

NYSE

Question 3

The most important element affecting your credit score is your:

Accepted Answer

payment history

Answer

types of credit used

Answer

length of credit history

Answer

credit utilization

Question 4

What would be the minimum payment on a balance of $85 if the minimum payment requirement is $3.00 or 5%, whichever is more?

Accepted Answer

$4.25

Answer

$3.00

Answer

$4.00

Answer

$5.00

Question 5

What are the four C’s of Credit?

Accepted Answer

Capacity, Capital, Collateral, Character

Answer

Capacity, Condition, Collateral, Character

Answer

Credit, Cash, Collateral, Character

Answer

Capacity, Capital, Collateral, Country

Question 6

Donald's credit application has been declined because of his poor credit history. Which statement is most likely to be true?

Accepted Answer

Donald has a history of not paying his bills on time

Answer

Donald has a history of paying his bills on time

Answer

Donald has never applied for credit before

Answer

Donald has a perfect credit score

Question 7

What is a credit score used for?

Accepted Answer

Determining a person's creditworthiness

Answer

Determining a person's income level

Answer

Determining a person's age

Answer

Determining a person's occupation

Question 8

Paying the minimum payment on a credit card every month will:

Accepted Answer

Keep accruing interest over time

Answer

Eliminate all future fees

Answer

Lower the interest rate

Answer

Pay off the balance in full

Question 9

What is the consequence of missing credit card payments?

Accepted Answer

Your credit score will be negatively affected

Answer

You'll have access to more credit

Answer

You'll receive cash rewards

Answer

You'll get a lower interest rate

Question 10

How many free credit reports are you legally entitled to per year from each credit bureau?

Accepted Answer

1

Answer

3

Answer

4

Answer

2

Question 11

The _____________ prevents lenders from denying credit on basis of race, gender, age, religion, marital status, national origin and public assistance.

Accepted Answer

Equal Credit Opportunity Act (ECOA)

Answer

Fair Housing Act (FHA)

Answer

Fair Credit Reporting Act (FCRA)

Answer

Consumer Credit Protection Act (CCPA)

Question 12

What is the main difference between secured and unsecured credit?

Accepted Answer

Secured credit requires collateral, while unsecured credit does not

Answer

Secured credit can be obtained without a credit check

Answer

Secured credit offers lower interest rates than unsecured credit

Answer

Unsecured credit has a longer repayment period than secured credit

Question 13

What happens if a borrower defaults on a secured loan?

Accepted Answer

The lender can seize the collateral

Answer

The collateral is returned to the borrower

Answer

The loan is forgiven and the borrower does not have to repay it

Answer

The borrower's credit score improves

Question 14

What is the repayment structure for installment credit?

Accepted Answer

Installment credit requires fixed monthly payments over a specified period of time.

Answer

Installment credit allows for minimum monthly payments based on outstanding balance.

Answer

Installment credit has no predetermined repayment structure.

Answer

Installment credit requires repayment of the full balance within 30 days.

Question 15

What is the primary purpose of revolving credit?

Accepted Answer

To provide ongoing access to funds for daily expenses and unexpected costs.

Answer

To establish a credit history with regular monthly payments.

Answer

To earn cashback and rewards on purchases.

Answer

To finance large one-time purchases like homes and cars.

Question 16

What is the main characteristic of revolving credit?

Accepted Answer

It allows you to borrow money up to a certain credit limit and repay a portion or the full balance each month.

Answer

It requires you to make fixed monthly payments over a specified period of time.

Answer

It is only available for large purchases like houses and cars.

Answer

It does not involve any interest or fees.

Question 17

What is the difference between revolving and installment credit?

Accepted Answer

Revolving credit allows you to borrow up to a predetermined limit and repay a portion of the balance each month, while installment credit is a loan that is repaid with fixed monthly payments over a set period.

Answer

Revolving credit allows you to borrow money from a bank, while installment credit allows you to borrow money from a credit card.

Answer

Revolving credit has lower interest rates than installment credit.

Answer

Installment credit allows you to borrow up to a predetermined limit and repay a portion of the balance each month, while revolving credit is a loan that is repaid with fixed monthly payments over a set period.

Question 18

What is a common example of revolving credit?

Accepted Answer

Credit cards

Answer

Mortgages

Answer

Auto loans

Answer

Student loans

Question 19

What is the minimum age requirement to apply for a credit card?

Accepted Answer

18

Answer

21

Answer

16

Answer

25

Question 20

What is a closing cost?

Accepted Answer

Fees and expenses associated with finalizing a home purchase.

Answer

The monthly payment towards the mortgage.

Answer

A fee paid to the real estate agent.

Answer

The down payment for a home loan.

Question 21

What is private mortgage insurance (PMI)?

Accepted Answer

Insurance that protects the lender in case the borrower defaults on the loan.

Answer

A fee paid to the real estate agent for their services.

Answer

A tax deduction for homeowners.

Answer

Insurance that protects the homeowner in case of property damage.

Question 22

What is a fixed-rate mortgage?

Accepted Answer

A type of home loan where the interest rate remains the same throughout the repayment period.

Answer

A home loan with fluctuating interest rates.

Answer

A loan offered exclusively to first-time homebuyers.

Answer

A mortgage with no down payment required.

Question 23

What factors can affect your credit score?

Accepted Answer

Payment history, credit utilization, length of credit history, types of credit used, and new credit applications.

Answer

Number of friends you have on social media and number of online purchases made.

Answer

Number of loans you have taken and total value of your assets.

Answer

Number of hours you spend studying and extracurricular activities you participate in.

Answer

Amount of money in your bank account and number of credit cards.

Question 24

Why is having a good credit score important?

Accepted Answer

A good credit score can help you qualify for loans, credit cards, and better interest rates.

Answer

A good credit score allows you to skip paying bills and loans.

Answer

Having a good credit score helps you get discounted merchandise.

Answer

A good credit score can increase your social media popularity.

Answer

Having a good credit score can increase your chances of winning a lottery.

Question 25

What is a good credit score range?

Accepted Answer

A good credit score range is typically considered to be between 670 and 739.

Answer

A good credit score range is typically considered to be between 400 and 499.

Answer

A good credit score range is typically considered to be between 600 and 669.

Answer

A good credit score range is typically considered to be between 950 and 1000.

Answer

A good credit score range is typically considered to be between 800 and 850.

Question 26

What is a credit card balance?

Accepted Answer

The amount of money you owe on your credit card

Answer

The amount of money available for you to borrow on your credit card

Answer

The interest rate charged on your credit card

Answer

The maximum amount you can spend on your credit card

Question 27

What is a credit card?

Accepted Answer

A card that allows you to borrow money from a bank to make purchases

Answer

A card that gives you unlimited free money

Answer

A card that can only be used for cash withdrawals

Answer

A card that is used for identification purposes

Related quizzes

Related quizzes