Personal Finance Final CH .7

installment credit

a borrowing arrangement in which regular monthly payments of principal and interest must be made

Which of the following statements is true regarding non-installment credit?

credit is usually issued for 30 days or less

The item that receives the most weight in the FICO credit scoring system is

credit payment history

The cost of using credit may result in ________ spending and ________ debt.

excessive; increasied

Which of the following will not help you establish a good credit history?

Making as many purchases as possible with cash

Which of the following is not a factor in the FICO credit scoring?

Marital status

The federal law that prohibits the denying of credit based on gender, age, race, natural origin, religion, or marital status is the ________.

Equal Credit Opportunity Act

All of the following situations are valid reasons to borrow funds except

borrowing for every day living expenses.

Credit extended to consumers for short periods of time to make specific purchases is

non-installment credit

The average credit card balance of undergraduate students is between

3000 and 7000

Of the following statements, which is not an advantage using credit?

Buying today and paying tomorrow seems ideal, but continual spending can lead to financial problems

The law that prohibits denying credit due to gender, age, race, natural origin, religion, or marital status is

Equal Credit Opportunity Act.

Which of the following is one of the three primary credit bureaus?

Equifax Experian TransUnion

Which of the following will not be included on your credit report?

FICO score

Which of the following is not true regarding revolving open-end credit?

If the balance is not paid off over a period of months, a penalty is incurred

Of the following statements, which is not a disadvantage of using credit?

It is more difficult to obtain than repay.

Which of the following is not a disadvantage of using credit?

Makes it easier to save

Which of the following is a disadvantage of using credit?

Slowing of progress toward financial goals

Paying your phone bill and electric bill on time each month will help you to establish a(n) ________.

credit history

A commitment to cover credit repayments under adverse conditions such as accident or illness is called

credit insurance

The impact of credit ________ saving and ________ spending.

decreases; increases

telephone company

extends credit by providing a service and billing for the service at the end of the time period

Creditors prefer a ________ amount of capital and ________ collateral in the best of circumstances.

high; high

Creditors prefer a ________ level of cash inflows and ________ level of cash outflows.

high; low

The ability to save funds is ________ when credit payments are ________.

increased; small reduced; small

Improper use of credit may

make it necessary to file for bankruptcy.

________ is short-term credit provided by some department stores to consumers to purchase specific items

non-installment credit

The minimum credit score required by financial institutions

varies by institution