Quiz answers

Select all that apply What is the procedure under consumer credit laws when denial of credit is discriminatory?

Sue the creditor. File a complaint with the government. Make the creditor aware of your understanding of the law.

How does the Fair Credit Billing Act protect consumer credit ratings?

By allowing consumers to challenge charges that are false and avoid having delinquent charges added to their credit history

When reporting suspicious email or calls from third parties?

Repot to the trade commission

True or false: People who have a strong willingness and ability to repay debts generally have the highest credit ratings.

True

A credit file contains your detailed _____ information

credit/ personal

What is typically in a credit file?

employer information whether you rent or own your home former address whether checks have been returned for insufficient funds

Which of the following is something that the Equal Credit Opportunity Act designed to do?

ensure that persons are not discriminated against because of their race ensure that persons are not discriminated against because of their sex ensure that persons are not discriminated against based upon their age

Which of the following should you consider when determining whether you can afford a loan

funds remaining for other expenses your monthly expenses your monthly pay

The Fair Credit Billing Act provides that you may withhold payment on damaged or defective goods or poor services you have purchased with a credit card as long as you have:

made a sincere attempt to resolve the problem with the merchant.

What do conditions mean in reference to credit?

the general economic conditions that can affect a borrower's ability to repay a loan

The Fair Credit Billing Act's underlining purpose is:

to protect consumer credit ratings

The __ in lending act prohibits creditors from giving inaccurate information or denying consumers the right to cancel credit accounts

truth

Select all that apply When creditworthiness is being determined, creditors look for which of the following?

Total debt Net income Employment history

True or false: A credit bureau is a reporting agency that collects credit and other information about consumers.

True

When referring credit capacity refers to

o the borrower's financial ability to meet the credit obligation.

Opting out is:

requesting removal of your name from mail and phone lists that solicit for credit offers.

A creditor cannot deny an adult credit based on

Age

How often should you review your credit report

Annually

When evaluating the 5 c of credit .... Is determined by a borrowed assets or net worth

Capital

rue or false: The ECO protects individuals from discrimination in credit transactions on the basis of factors including race, color, age, sex, and marital status.

True

The Act that prohibits creditors from giving inaccurate information or denying consumers the right to cancel credit accounts is:

Truth in Lending Act

Security features currently being added to credit cards to deter counterfeiting include:

. ultraviolet ink on the company logo. a holograph that changes color and image.

Click and drag on elements in order Rank the following items in the order they should be completed to dispute a billing error.

1. Write a letter of complaint. 2. Purchase placed in dispute. 3. Receive an acknowledgment from the credit company. 4. Purchase removed or credit issued to account.

the ideal dept payment to income ratio

15%

Conditions, one of the five Cs of credit, refers to the general (blank) conditions that can affect your ( blank) to repay a loan.

Blank 1: economic or financial Blank 2: ability or capacity

One of the 5 Cs of credit is .... This is a valuable asset that can be taken to satisfy a loan obligation.

Collateral

How is collateral used in evaluating loans?

Collateral is used when you apply and sign for a loan, pledging some kind of property to secure the loan.

What does the Fair Credit Billing Act (FCBA) do?

It protects consumers with billing mistakes and provides assistance in avoiding payment for defective merchandise.

Who can a victim of identity theft call to network with other victims?

Privacy Rights Clearinghouse

What is the proper way to correct a billing error?

Write a clear letter reporting the error to the credit agency.

Capacity is the borrower's financial ___ to meet the credit obligations.

ability

What is credit bureau

an agency that collects information on how promptly people and businesses pay their bills

Typically, qualified cosigners:

are able to pay loan payments

John has discovered an error on his credit report. He has contacted the credit bureau. He should:

provide pertinent information to identify the error.

The Fair Credit Reporting Act of 1971:

regulates the use of credit reports, requires deletion of obsolete information, and allows access of their files to consumers.

When referring to credit character means

the borrower's attitude toward credit obligations

It is important to evaluate the reason for taking a home equity loan

True

When cosigners sign their loans, they:

are stating that they are able to pay for the loan if required.

Which of the following are the names of credit bureaus

Experian TransUnion Equifax

True or false The fair credit reporting act was enacted in 1960

False

The law that protects consumers by setting standards for correcting billing mistakes and allowing customers to avoid paying for defective merchandise is called

Fair Credit Billing Act

True or false: Although the five Cs are important, capacity is the only one that really matters.

False

True or false: An individual should get intimidated by emails that warn of dire consequences for not following the sender's instructions.

False

True or false: The three names of the major credit reporting agencies are Trans Union, Equifax, and Experiment.

False

True or false: To opt out from prescreened solicitations, you may notify the credit reporting agencies via mail.

False

Examples of protecting against fraud are

be sure your credit card is returned to you after a purchase not giving your card number over the phone unless you have initiated the call

A borrower's assets in excess of liabilities is called ______.

capital

Character, capacity, capital, collateral, and conditions are known as

Five C's of Credit

True or false: When suing a creditor, you can sue for actual damages and $15,000 in punitive damages.

False

How does the Secret Service fight identity theft?

The Secret Service typically focuses on financial fraud cases with large amounts of money involved.

If you purchase a new but defective item that the business will not accept as a return, what does the FCBA require?

The credit card company will allow you to withhold payment on such an item because it is defective.

The most important thing you can do to improve your credit score is to pay your bills on

Time

Why are the five Cs used?

To help identify good customers for credit approval

To improve your credit score, it is important to:

pay your bills on time. understand the computation of outstanding debt. avoid applying for new credit cards.