Personal Finance: chapter 6

The credit bureau cannot charge you a disclosure fee if you ask to see your file within _____ days of being notified of a denial based on a credit report.

60

Which one of the following is not a source that provides data to credit bureaus?

Internal Revenue Services

Installment cash credit is a:

direct loan of money for personal purposes

Which one of the following would not typically be closed-end credit?

line of credit from your bank

In determining your credit capacity, you first provide for basic necessities such as:

mortgage or rent

Revolving check credit is a:

prearranged loan for a specified amount that you can use by writing a special check

Jake Skinner purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days. What type of credit did Jake use?

single lump sum credit

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

33%

Which federal law allows consumers to withhold payment for faulty or defective goods or services (within certain limitations) when purchased with a credit card?

Fair Credit Billing Act

Mike Cook has been receiving calls at work every two hours from a collection company that is trying to collect a past due loan from him. He believes this is harassment and that the collections company is not allowed to do this. Which consumer protection law provides protection law provides protection from this type of harassment?

Fair Debt Collection Practices Act

Which federal consumer credit lat regulates the advertising of credit terms?

Truth in Lending Act

In evaluating your credit application, a lender may:

ask your age

Which of the following is most likely not a valid reason for using credit?

borrowing to pay for your expensive dinner and movie each week

A loan officer is examining your income and the amount of your existing debt payments in deciding whether to make a loan to you today. Which aspect of the 5 C's of the lending is the loan officer most likely to look at?

capacity

A term that refers to the borrower's assets or net worth is called:

capital

The borrower's attitude toward his or her credit obligations is called:

character

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

collateral

The accuracy of credit reports has worsened recently.

false

There are very few valid reasons for using credit.

false

With closed-end credit, loans are made on a continuous basis and you make at least a partial payment each billing period.

false

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

incidental credit

Today, Michael purchased a laptop computer from a retail outlet. He has agreed to pay for this purchase in full 30 days from today. This is an example of:

single lump-sum credit

Karen Price is 55 years old, divorced, and has worked at her current job for five years. She is interested in looking at her credit report. Which of the following pieces of information should she find in that report?

the outstanding balance on the Visa card she has today

A good example of open-end credit is:

the use of a bank credit card to make a purchase

"Shopaholics" and young adults are most vulnerable to misusing credit.

true

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

true

Credit bureaus obtain their data from banks, finance companies, merchants, credit card companies, other creditors, and court records.

true

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

true

Single lump-sum credit is a loan that must be repaid in total on a specified day, usually within 30 to 90 days.

true

If you cosign a loan:

you will be required to pay the loan in full if the borrower defaults on the payments