Financial lit Standard 7

If your credit card is lost or stolen and you report it immediately to your credit card company, the most you can lose is a. $10. b. $25. c. $50. d. $100.

$50.

Most negative information — such as late payments and defaults on loans — stays in your credit file for _________ years. a. 2 b. 15 c. 7 d. 10

7

APR a. Applied Personal Rate. b. Applied Percentage Rate. c. Annual Percentage Rate. d. Annual Personal Rate of Interest.

Annual Percentage Rate

Which of the following is an example of secured credit? a. Borrowing to buy a car b. Getting a credit card c. Making payments to pay for a hospital bill d. Borrowing to pay for a vacation

Borrowing to buy a car

Requires free credit reports for the unemployed, persons on public assistance, and fraud victims.

Consumer Credit Reporting Act

Makes it illegal for groups to make false promises or claims about improving your credit history.

Credit Repair Organizations Act

Ensures all individuals have an equal opportunity to receive credit or loans.

Equal Credit Opportunity Act

Lenders in the United States rely on three primary credit bureaus. Which of the following is NOT one of them? a. Experian b. Equifax c. Equitable d. TransUnion

Equitable

When you apply for a loan, most lenders will check your ____________ score. a. FICO b. EPASS c. Consumer Credit d. Personal Finance Test

FICO

Prohibits debt collectors from engaging in unfair, deceptive, or abusive practices when collecting debts.

Fair Debt Collection Practices Act

Which of the following statements is TRUE? a. Higher FICO scores results in higher interest rates. b. Higher FICO scores results in higher payments on loans. c. Lower FICO scores result in lower interest rates. d. Lower FICO scores result in higher interest rates.

Lower FICO scores result in higher interest rates.

Which of the following types of lenders offers loans to high risk customers at very high fees? a. Payday loan companies b. Credit card cash advance c. Home equity bank loans d. Credit unions

Payday loan companies

Which of the following statements is FALSE? a. Qualifications for borrowing money are basically the same from lender to lender. b. Lenders are most concerned about your ability to repay the loan. c. Building a good relationship with a banker can help you get a loan. d. When shopping for a loan, it pays to compare lenders.

Qualifications for borrowing money are basically the same from lender to lender

In Oklahoma, MOST consumer protection laws are enforced by the a. Oklahoma Bankers Association. b. Oklahoma Department of Treasury. c. State Office of Personal Finance. d. State Attorney General's Office.

State Attorney General's Office.

Which of the following is the BEST reason to borrow money a. To buy a new pair of shoes for the prom b. To pay your cell phone bill c. To pay off your credit cards d. To buy a house

To buy a house

Requires all lenders to inform potential lenders about the cost of borrowing money, including finance charges and the annual percentage rate.

Truth in Lending Act

Most credit cards are a. the same as cash. b. not reported to the credit bureau. c. an example of installment credit. d. an example of secured credit.

an example of installment credit.

An establishment that collects and distributes credit information of individuals and businesses.

credit bureau

An official record of a borrower's credit activity, including borrowing and payments.

credit history

MOST consumer credit laws are designed to a. punish consumers for making "poor choices" when borrowing money. b. punish lenders for "mistreating" consumers. c. ensure that consumers and lenders are treated "fairly" and "equally." d. make it more difficult for consumers to get loans.

ensure that consumers and lenders are treated "fairly" and "equally."

Before applying a loan, it is advisable to a. get a copy of your credit report to check it for errors. b. ask your banker to review your report to see if you will qualify. c. ask your creditors to remove any negative information from your credit file. d. wait to see what happens, then complain if something is wrong with your credit file.

get a copy of your credit report to check it for errors.

A loan repaid with a fixed number of equal payments.

installment credit

Payment for the use of someone else's money.

interest

The percentage rate of interest charged to the borrower.

interest rate

A type of contract between the borrower and the lender explaining the requirements of fulfilling the loan.

loan agreement

A prepayment clause allows the borrower to a. borrow additional funds as needed. b. make additional payments or pay off a loan early. c. pay lower interest rates if they make their payments on time. d. skip a loan payment without penalty when they do not enough money to pay their bills.

make additional payments or pay off a loan early.

Your credit score will impact all of the following EXCEPT your a. ability to get a job. b. ability to get an apartment. c. interest rates. d. monthly balance.

monthly balance.

When making credit card payments, always pay a. the minimum amount requested on the statement. b. more than the minimum amount requested on the statement. c. with a check. d. with cash.

more than the minimum amount requested on the statement.

If you want to dispute any information included in your credit file, you a. must sue the credit bureau. b. need an attorney to write a letter. c. need to write a letter or file a report online with the credit bureau. d. have no right to protest and must wait until the credit bureau removes it from your file.

need to write a letter or file a report online with the credit bureau.

When computing your credit score, the most important factor is do you a. pay your bills on time? b. use credit cards? c. work for the government? d. need the money?

pay your bills on time?

Credit with collateral for the lender

secured credit

Your credit file contains much information about you, including a. your age. b. your race. c. the number of times you apply for credit. d. the place where you work and your supervisor's name.

the number of times you apply for credit

People borrow money because a. it is a convenient, low cost way to make purchases. b. they do not have enough cash or savings to make a purchase. c. they do not make enough money. d. they are uninformed about other ways to make purchases.

they do not have enough cash or savings to make a purchase

Interest rates on credit cards a. vary with your level of income. b. are basically the same for everyone. c. will vary greatly, depending upon several factors. d. will vary little from credit company to credit card company.

will vary greatly, depending upon several factors.