Personal Finance Final CH .7
installment credit
a borrowing arrangement in which regular monthly payments of principal and interest must be made
Which of the following statements is true regarding non-installment credit?
credit is usually issued for 30 days or less
The item that receives the most weight in the FICO credit scoring system is
credit payment history
The cost of using credit may result in ________ spending and ________ debt.
excessive; increasied
Which of the following will not help you establish a good credit history?
Making as many purchases as possible with cash
Which of the following is not a factor in the FICO credit scoring?
Marital status
The federal law that prohibits the denying of credit based on gender, age, race, natural origin, religion, or marital status is the ________.
Equal Credit Opportunity Act
All of the following situations are valid reasons to borrow funds except
borrowing for every day living expenses.
Credit extended to consumers for short periods of time to make specific purchases is
non-installment credit
The average credit card balance of undergraduate students is between
3000 and 7000
Of the following statements, which is not an advantage using credit?
Buying today and paying tomorrow seems ideal, but continual spending can lead to financial problems
The law that prohibits denying credit due to gender, age, race, natural origin, religion, or marital status is
Equal Credit Opportunity Act.
Which of the following is one of the three primary credit bureaus?
Equifax Experian TransUnion
Which of the following will not be included on your credit report?
FICO score
Which of the following is not true regarding revolving open-end credit?
If the balance is not paid off over a period of months, a penalty is incurred
Of the following statements, which is not a disadvantage of using credit?
It is more difficult to obtain than repay.
Which of the following is not a disadvantage of using credit?
Makes it easier to save
Which of the following is a disadvantage of using credit?
Slowing of progress toward financial goals
Paying your phone bill and electric bill on time each month will help you to establish a(n) ________.
credit history
A commitment to cover credit repayments under adverse conditions such as accident or illness is called
credit insurance
The impact of credit ________ saving and ________ spending.
decreases; increases
telephone company
extends credit by providing a service and billing for the service at the end of the time period
Creditors prefer a ________ amount of capital and ________ collateral in the best of circumstances.
high; high
Creditors prefer a ________ level of cash inflows and ________ level of cash outflows.
high; low
The ability to save funds is ________ when credit payments are ________.
increased; small reduced; small
Improper use of credit may
make it necessary to file for bankruptcy.
________ is short-term credit provided by some department stores to consumers to purchase specific items
non-installment credit
The minimum credit score required by financial institutions
varies by institution
