BUS160 Test 2

A reasonably good debt-equity ratio for an individual, excluding a home mortgage would be:

.35-.40

If you have declared personal bankruptcy, that fact may be reported to credit bureaus for ____ years.

10

perts suggest that you spend no more than ____% of your net income on non-housing related credit purchases.

20%

e's net pay per month is $2000. What is the maximum dollar amount of debt payments he should have?

400

The Baby Boom generation currently represents about 30% of the population, but holds nearly ____% of the debt outstanding.

60%

most of the information in your credit file may be reported for ___ years

7

Which can be included in your credit score?

Marital Status

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

Mortgage/rent

Which of the following agencies can produce for a subscribing creditor, almost instantaneously, a report about your past and present financial activity?

The Credit Bureau

Which federal consumer credit law provides specific cost disclosure requirements for the annual percentage rate (APR) and the finance charge as a dollar amount?

Truth in Lending Act

In evaluating your credit application, a lender may:

ask your age

not a valid reason for using credit:

borrowing to support monthly entertainment activities

Debt- to -equity ratios are

calculated by dividing total liabilities by net worth

A loan officer is examining your income and the amount of your existing debt payments in deciding whether or not to make a loan to you today. Which of the credit C's is the officer assessing?

capacity

The borrower's financial ability to meet credit obligations is called:

capacity

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

capital

If you are denied credit, your first step should be:

check your credit bureau file

Kathy purchased a $1,000 digital tv from Young's Appliances. She will make 12 equal payments over the next year to pay for it. She is using:

closed end credit

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

collateral

What is the first thing you should you do if your identity is stolen?

contact the 3 major credit bureaus

when did installment credit explode on the american scene?

during the early 1900's when automobiles were first mass-produced

Which federal law protects you by requiring credit bureaus furnish accurate and complete information to lenders?

fair-credit reporting act

disadvantage of using credit:

increases propensity to overspend

Another name for closed-end credit is:

installment credit

the debt-payments-to-income ratio is

monthly credit payments/net pay

another name for open end credit

revolving credit

eg Thompson uses his Visa card to purchase a new digital camera and lens. What type of credit did Greg use?

revolving credit

Which federal law limits a cardholder's liability for unauthorized use of a card to $50?

truth in lending act

what in not included as a part of the calculation of your FICO score?

whether the accounts are single or jointly held

when/if you co-sign a loan

you will have to pay the debt if the borrower does not