Module 7

Molly purchased a $1,500 dishwasher from Best Appliances. She will make 12 equal payments over the next year to pay for it. She is using

Closed-end credit.

____________________________ is more common and has a _______________ interest rate charged by most lenders.

Closed-end credit; lower

When compared to __________________, ___________________ is often more difficult to obtain because the lender must rely upon your word that you will pay back the loan.

Closed-end credit; open-end credit

Lexi currently has a net worth of $110,465 and liabilities equal to $24,735. What does her debt ratio indicate?

For every $1 of net worth, Lexi has 22 cents of liabilities.

Which of the following is mentioned in the video as the top identity theft issue?

Government Documents

Landon is looking to obtain a home equity loan. A lender will loan 65% of the home's current market value, which is $200,000. Landon currently owes $90,000 on his original home mortgage. What is his home equity credit limit available?

$40,000

Rachel currently has a net worth of $132,250 and liabilities equal to $38,650. What is her debt ratio?

0.29

Which of the following electronically subtracts money from your savings or checking account to pay for goods and services?

A debit card

Which of the following is an example of closed-end credit?

A mortgage loan.

What step can you take if your credit application is denied?

Ask the reasons why you were denied credit.

Which of the following is an example of closed-end credit mentioned in the video?

Automobile Loans

According to the video, what should you do if your identity is stolen?

Contact the creditors for any accounts that have been tampered with or opened fraudulently and Contact the fraud department of each of the three major credit bureaus.

When misused, credit can result in

Default. Bankruptcy Loss of creditworthiness A less satisfying life

All of the following are factors mentioned in the video that individuals should consider before obtaining a home equity loan, except:

Location of home

Perhaps the greatest disadvantage of using credit is

The temptation to overspend.

All of the following are reasons mentioned in the video of why homeowners obtain home equity loans, except:

To pay for family vacations.

According to the video, the quickest way to improve your debt-to-equity ratio is:

To pay off some of your debts.

According to the video, all of the following are some additional options to avoid identity theft, except:

Use as few online sources as possible.