Chapter 8 Credit Records and Laws

Your letter of complaint must be acknowledged by the creditor within______________ days.

30

The ____________ created the Consumer Financial Protection Bureau.

Dodd-Frank Act

The _________________ prohibits discrimination in judgement of creditworthiness.

Equal credit Opportunity Act

The ____________ provides that you may see your credit report at no charge within 60 days of a credit denial

Fair Credit Reporting Act

The ________________ gives you the right to view your credit report and dispute inaccurate or incomplete information.

Fair Credit Reporting Act

A credit bureau is a nonprofit company established by members for the benefit of members.

False

A debt collector is allowed to make telephone calls at any time in order to collect overdue balances.

False

An excellent credit rating results when you pay your bills on the due date every month and never miss a payment.

False

If you believe your bill contains an error, there usually is no hurry in resolving the problem.

False

The consumer Credit Protection Act prevents discrimination in the evaluation of creditworthiness.

False

The five "C's" of credit are character, capacity, capital, conservation, and collateral.

False

Debt collectors are required to

Give consumers the chance to clarity and dispute their bills.

A credit rating is a letter grade (A, B, C, D) often assigned by credit bureaus based on a consumer's credit score.

True

A person is entitled to one free credit report every 12 months from each of the three major credit bureaus.

True

Businesses can make an inquiry to check your credit without your permission.

True

In a point system, the credit bureau assigns points based on factors such as amount of income, amount of current debt, and number of late payments.

True

Information gathered for credit reports may come from credit applications when you apply for credit.

True

It is lawful for creditors to ask you for personal information, such as employment and residence history, in order to determine your creditworthiness.

True

Most lenders utilize some variation of the five "C's" of credit to determine whether or not a person is considered a good credit risk.

True

The Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) was enacted to provide more consumer credit protections.

True

You may need a cosigner to get started with credit. A cosigner guarantees that payments will be made as agreed.

True

Your credit history is a complete record of your experience with credit

True

Your credit history is an important record of your past experiences with credit, and you have rights and responsibilities for its accuracy.

True

Which of the following would probably not be included in your credit report?

Your medical history

credit bureau

a business that gathers, stores, and sells credit information to other businesses

credit freeze

a consumer request that requires the credit bureaus to deny all access to a consumer's credit information or files

creditworthy

a determination that you are a good credit risk

point system

a method of evaluation in a credit bureau assigns points based on several factors to compute credit scores for consumers

debt collector

a person or company hired by a creditor to collect the overdue balance on an account

credit inquiry

a request by a business with a "permissible purpose" to check your credit.

character

a responsible attitude toward honoring obligations, often judged on evidence in the person's credit history.

credit report

a written statement of a consumer's credit history

Which is not one of the five "C's" of credit?

a.) character b.) challenge + c.) capacity d.) collateral

billing statement

an itemized bill showing charges, credits, and payments posted to your account during the billing period

subscribers

businesses that supply information to credit bureaus about their customer's accounts

Credit reports are issued by

credit bureaus

Credit bureaus collect information about consumers and prepare ___________ based on the information they collect.

credit reports

In many cases, people with poor credit ratings have

failed to pay debts, filed for bankruptcy, missed some monthly payments

Paying your bills on time and paying more than the minimum payment due earns you a(n) _______________ credit rating.

good

rate shopping

looking around for the best interest rate on an auto or mortgage loan

Which of the following would be a good first step in getting started with credit?

opening a savings account

Which of the following categories constitutes the largest percentage of your FICO score?

payment history

discrimination

the act of treating people differently based on prejudice rather than individual merit

Credit history

the complete record of your borrowing and repayment performance.

capacity

the financial ability to repay a loan with present income.

credit score

the total assigned points based on several factors that tells potential creditors the likelihood that you will repay debt as agreed

Which of the following questions could a creditor legally ask you?

"Where do you work?"

The Truth in Lending Act limits the consumer's liability to ________________ after the consumer reports a credit card lost or stolen.

$50

Bankruptcy information stays on a credit report for _________________ years.

10

If you believe there is an error in your billing statement, your complaint must be written in writing and mailed within ____________ days after you receive the statement.

60

Within ________________ days of receiving your complaint, the creditor must either correct the error or explain why the bill is correct.

90

Which of the following could become part of your credit record?

A lawsuit, Bankruptcy, and a divorce

credit rating

A measure of creditworthiness often identified by a letter grade (A, B, C, D)

To start building a good credit history, you should:

Apply for a credit card, open a stored credit account, open a savings account, open a checking account, and get a small loan.

A person with a credit score of 700 would have a credit rating of

B

The act known for its provisions requiring full disclosure of all costs in a credit transaction is called the

Consumer Credit Protection Act