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.
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
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
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.
Opting out is:
requesting removal of your name from mail and phone lists that solicit for credit offers.
When referring to credit character means
the borrower's attitude toward credit obligations
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
When reporting suspicious email or calls from third parties?
Repot to the trade commission
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
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
True or false: People who have a strong willingness and ability to repay debts generally have the highest credit ratings.
True
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.
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.
When referring credit capacity refers to
o the borrower's financial ability to meet the credit obligation.