Chapter 17: Credit Records and Laws

Credit files are updated _____ by computers and search procedures. (a) daily (b) weekly (c) monthly (d) yearly.

A

Which of the following is an unlawful purpose for a credit report? (a) mailing list information (b) credit application (c) employment application (d) insurance

A

Debt collectors are required to: (a) use any means available to collect debts (b) give consumers the chance to clarify and dispute their bills (c) intimidate customers into paying (d) none of these

B

To pay your bills on the due date or soon after is to earn a(n) _____ credit rating. (a) excellent (b) good (c) fair (d) poor

B

To see your credit file at any time would cost you: (a) nothing, it is free (b) a small charge (c) $50 or more (d) nothing, you cannot see your file at any time.

B

Your letter of complaint must be acknowledged in _____ days. (a) 10 (b) 30 (c) 60 (d) 90

B

If you believe there is an error in your statement, your complaint must be in writing and mailed within _____ days after you receive the statement. (a) 10 (b) 30 (c) 60 (d) 90

C

The Truth-in-Lending Act limits your liability when a credit card is lost or stolen to the first _____, unless the card is reported lost or stolen before it can be used. (a) $10 (b) $25 (c) $50 (d) $100.

C

The act known for its provisions requiring full disclosure of all charges in a credit transaction is called the: (a) Fair Credit Reporting Act (b) Fair Credit Billing Act (c) Truth-in-Lending Act (d) Equal Credit Opportunity Act

C

The act that provides that you may see your credit file at no charge within 30 days of a credit denial is the: (a) Fair Credit Billing Act (b) Truth-in-Lending Act (c) Fair Credit Reporting Act (d) Equal Credit Opportunity Act

C

Which is not one of the five Cs of credit? (a) character (b) capacity (c) challenge (d) collateral

C

Which of the following questions could a creditor legally ask you? (a) "Do you plan to have children?" (b) "What is your ethnic origin?" (c) "Where do you work?" (d) "What church do you attend?"

C

Which of the following would be a good first step in getting started with credit? (a) applying for a credit card (b) paying off a loan (c) opening a savings account (d) opening a store credit account

C

Which of the following would probably not be included in your credit report? (a) monthly balances of your accounts (b) a listing of your credit accounts (c) your medical history (d) whether you own or rent

C

_____ is the ability to repay a loan or make payments on a debt out of current income.

Capacity

A responsible attitude toward paying bills and meeting obligations on time is called _____.

Character

Existing debts, stability of employment, and personal factors that determine a person's ability to meet financial obligations are called _____.

Conditions

A(n) _____ is a business that accumulates, stores, and distributes credit information to members.

Credit Bureau

Your _____ will answer questions about how you have paid your bills, how many bills you have had and what type, how much total credit you have been given, and how much credit appears to be outstanding now.

Credit history

A credit bureau issues a written statement called a(n) _____, which itemizes accumulated information about a person through subscribers and public records.

Credit report

In determining your _____ or overall ability to handle credit, a creditor will ask about your past credit performance.

Creditworthiness

Credit reports are issued by: (a) credit unions (b) subscribers (c) creditors (d) credit bureaus

D

In many cases, people with poor credit ratings have: (a) missed some monthly payments (b) have failed to pay back debts (c) have filed for bankruptcy (d) all of these

D

Which of the following could become part of your credit record? (a) a lawsuit (b) a divorce (c) bankruptcy (d) all of these

D

Within _____ days of receiving your complaint, the creditor must either correct the error or explain why the bill is correct. (a) 10 (b) 30 (c) 60 (d) 90

D

A(n) _____ is a person hired to collect the balance due.

Debt Collector

The act of treating people differently based on prejudice rather than individual merit is called _____.

Discrimination

A(n) _____ credit rating is earned when you pay your bills before the due date.

Excellent

A(n) _____ credit rating is given to a person who pays during the grace period, but occasionally takes longer.

Fair

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 judgment of creditworthiness.

False

A(n) _____ credit rating is earned when you pay your bills on the due date or within a short grace period.

Good

A(n) _____ is a type of rating used by credit bureaus in determining a person's general creditworthiness.

Point system

A(n) _____ credit rating is likely to result in denial of new credit.

Poor

A member of the credit bureau is called a(n) _____ and pays fees for use of the bureau's services in collecting information and issuing reports.

Subscriber

A person who is considered a good credit risk usually meets five basic qualifications, called the five Cs of credit.

True

A point system of credit rating is based on assigning value to such things as employment, amount of income, amount of current debt, or number of late payments.

True

If you are denied credit based on a credit report, inaccurate information in your file may be the case.

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 large credit bureaus are computerized clearinghouses that search for and retrieve information to make reports.

True

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

True

The Consumer Credit Protection Act of 1968 is also known as the ________.

Truth-In-Lending Law