credit

Judi and Phil had a joint VISA credit card while they were married. They are now divorced. Who is responsible for the balanced owed on the VISA card?

A: Both Judi and Phil The creditor can collect from Judi or Phil. They are both legally responsible for paying off the joint account.

Predatory lending practices generally include:

A: Very high interest rates and fees Predatory lending uses abusive practices in any type of credit but the lenders primarily target applicants for home mortgages, home equity, and home refinancing loans. This practice tends to occur in low-income neighborhoods, particularly those with a large number of elderly or minority homeowners who have a poor credit history, or need cash quickly. These lenders use deceptive advertising and high pressure salespeople and give repayment terms that the borrower cannot afford

When a person brings an item to a pawnshop to obtain cash, the transaction is considered

A: a collateralized loan. Since pawnshops make loans based on determining the value of collateral (a tangible object such as jewelry, cameras, musical instruments) they receive, the loan is considered a collateralized loan

What is meant by an uncollateralized loan?

B: A personal loan without assets to cover the loan amount. ?Collateral? is a tangible asset that is used to secure a loan. In the case of a mortgage, the actual house or apartment serves as the collateral for that loan. The same is true of a car loan. If the person who takes the loan, defaults on that loan, the bank or other lending agency has the right to keep the collateral. Therefore, an ?uncollateralized loan? is one that does not have an asset to support the loan.

Josh is shopping for a car loan. A friend told him to compare the actual cost of the loan for one year expressed as a percentage from three banks. He needs to ask for the:

B: Annual percentage rate (APR) The true cost of credit expressed as a percentage is the Annual Percentage Rate (APR), while the finance charge is the cost of credit expressed in dollars and is used in calculating the APR.

When a person declares bankruptcy that fact will appear on the person?s credit report

B: for a 10 year period. Most of the adverse information on a credit report appears for 7 years. After a declared bankruptcy, the limit is 10 years

The decision to give an applicant credit is made a:

C: Creditor A credit reporting agency collects credit information from creditors and provides that information to potential creditors to interpret. The potential creditor (such as a credit card company), not the credit reporting agency, decides whether to grant an applicant credit based on information the consumer gives on the application and the information on the credit report provided by a credit reporting agency.

Which of the following is considered to be open-end credit?

C: Department store charge cards Open-end credit is a revolving live of credit that is offered by banks and other lenders to consumers. There is a limit set on the line of credit and the funds, products or services are accessed using a credit or debit card, check, store charge card or cash advance. Consumers pay interest on the outstanding balance. A car loan is made for a specified amount and a specific length of time and is therefore considered closed-end credit. A mortgage loan is also considered a form of closed-end credit since the house serves as collateral for the loan which is made at a specified interest rate for a specified time period.

A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?

C: Notify the credit card companies in order to negotiate a new payment plan. When experiencing financial difficulties, the first action to take is to notify creditors, in this case the three credit card companies. Quite often the company will assist in negotiating new terms.

A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?

C: Notify the credit card companies in order to negotiate a new payment plan. When experiencing financial difficulties, the first action to take is to notify creditors, in this case the three credit card companies. Quite often the company will assist in negotiating new terms

A credit card finance charge is:

C: The dollar amount it costs to use credit The finance charge is the cost of credit in dollars. It is calculated on a credit card's unpaid balance. A finance charge, the cost of having the debt a longer time, is added to the outstanding credit card balance.

Victims of predatory lending practices are typically:

C: The elderly and people with a poor credit history Predatory lending uses abusive practices in any type of credit but the lenders primarily target applicants for home mortgages, home equity, and home refinancing loans. This practice tends to occur in low-income neighborhoods, particularly those with a large number of elderly or minority homeowners who have a poor credit history, or need cash quickly. These lenders use deceptive advertising and high pressure salespeople and give repayment terms that the borrower cannot afford.

To qualify for a Federal Housing Administration (FHA) loan, a person must generally

C: fulfill income guidelines The Federal Housing Administration (FHA) insures lenders who make mortgage loans that are riskier than regular bank loans because FHA loans are made to individuals who usually would not qualify for regular low-cost mortgages from banks (usually first-time home buyers with lower income and a weaker credit score). The objective of this federal agency is to encourage home ownership while helping to protect the lenders at the same time.

You were approved for a loan that combines all your debts into one loan with lower payments based on a longer repayment period or lower APR. This type of loan is a:

D: Consolidation loan A credit reporting agency collects credit information from creditors and provides that information to potential creditors to interpret. The potential creditor (such as a credit card company), not the credit reporting agency, decides whether to grant an applicant credit based on information the consumer gives on the application and the information on the credit report provided by a credit reporting agency.

You are behind on your debt payments and go to a responsible credit counseling service, the Consumer Credit Counseling Services. How can they help you?

D: They can work with those who loaned you money to set up a repayment schedule you can afford to make. A credit counseling service can work out an extended repayment program with your creditors. Then, you give part of your paycheck to the counseling service each payday, and they make payments to your creditors. The counseling service is often able to work out a better repayment plan than you could negotiate by yourself.