chapter 5- personal finance
what can you do if you are unable to meet you credit obligations
1. contact creditors to set up a plan to make lower payments. 2. ask friends/fam for help 3. refinance home/car
what to do if your identity is stolen
1. file a police report, 2. contact creditors, 3. contact all 3 credit reporting agencies: TransUnion, Equifax, Experian
when you complain about your billing error, the creditor must acknowledge your letter within
30 days
FICO scores range
350-850
a consumer credit counseling services is affiliated with
National Foundation for Consumer Credit
credit limit increased to 10,000 is an ex of
a line of credit
looking at your income and the amount of existing debt payments; what aspect of the 5Cs of lending are you looking at
capacity
two choices declared for personal bankruptcy
chapter 7 chapter 13
a valuable asset pledged to assure loan payments and subject to seizure upon default is
collateral
the bankruptcy abuse prevention and consumer protection act requires debtors to
complete an approved instructional course in personal financial management
what do you do if your identity is stolen
contact fraud departments of each of the 3 major credit bureaus
installment cash credit is
direct loan money for personal purposes
debt payments-to-income ratio is
divide monthly debt payments by net monthly income
debt-to-equity ratio is
divide total liabilities by net worth
which fed consumer credit law prohibits credit discrimination based on sex and marital status
equal credit opp act
t/f: consumer credit works because people by large are dishonest and irresponsible
f
t/f: credit cards rarely offer the same range of consumer loans that banks and other financial institutions do
f
t/f: most economists do not recognize consumer credit as a major force in the american economy
f
t/f: borrowing from car dealers, appliance stores, department stores, is relatively inexpensive
f. expensive
t/f: the new bankruptcy law made it easier for consumers to file a ch 7 bankruptcy
f. harder
t/f: with an open-end credit, you pay back one-time loans in a specified period of time in equal amounts
f: closed end
which fed law protects you by requiring credit bureaus to furnish correct & complete info to creditors
fair credit reporting
the fed trade commission enforces
fair debt collection practices act
total dollar amount you pay to use credit
finance charge
installment sales credit is
loan that allows you to receive merchandise such as a refrigerator or furniture
A consumer credit counseling service is
local, nonprofit organization that provides debt counseling services
ex of close-end credit
mortgage loan
what are the signals of potential debt problems
paying only the minimum balance each month, missing payments or paying late, using savings to pay normal bills, depending on overtime to meet normal expenses (ALL of the above)
another name for open-end credit is
revolving credit
t/f: anyone overburned by credit obligations can phone, write, or visit a CCCS office (consumer credit counseling service)
t
t/f: consumer credit dates back to colonial time
t
t/f: credit is an arrangement to receive cash, goods, or services now and pay for them in the future
t
t/f: if you credit application is denied, the equal credit opportunity act (ECOA) gives you the right to know the reasons
t
t/f: in the 5cs of credit, capital refers to your assets or net worth
t
t/f: it is safer to use credit since charge accounts and credit cards let you shop and travel without carrying large amounts of cash
t
t/f: perhaps the greatest disadv of using a credit card is the temptation to overspend
t
t/f: three most common types of closed-end credit are installment sales credit, installment cash credit, and single lump-sum credit
t
t/f: you may not be denied credit because you receive social security or public assistance
t
which fed law limits a cardholder's liability for unauthorized use of a card to $50
truth in lending
