Question 1

A lender requires a cosigner even when a borrower meets the lender's criteria for making a loan.

Accepted Answer

A) True 
 B)False

Question 2

What is consumer credit? What are its advantages and disadvantages?

Accepted Answer

Answers will vary.
Consumer credit is th...

Question 3

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

Accepted Answer

A)  capacity.
B)  character.
C)  capital.
D)  collateral.
E)  conditions.F) C) and E)
G) C) and D)

Question 4

What do creditors look for when you apply for credit?

Accepted Answer

Creditors determine credit wor...

Question 5

Which federal consumer credit law requires "credit repair" companies to give consumers a written contract that can be canceled within three business days?

Accepted Answer

A)  Fair and Accurate Credit Transactions Act
B)  Fair Debt Collection Practices Act
C)  Fair Credit Billing Act
D)  Truth in Lending Act
E)  Consumer Credit Reporting Reform ActF) All of the above
G) B) and E)

Question 6

Amy Farmer is getting a loan to buy a used car.The bank wants to know the trade-in value of the car she is purchasing.Which of the 5 Cs of credit is the bank examining?

Accepted Answer

A)  Character
B)  Capacity
C)  Capital
D)  Collateral
E)  ConditionsF) B) and E)
G) A) and B)

Question 7

Which federal consumer credit law prohibits creditors from requiring women to reapply for credit upon a change in marital status?

Accepted Answer

A)  Fair Debt Collection Practices Act
B)  Fair Credit Billing Act
C)  Equal Credit Opportunity Act
D)  Fair Credit Reporting Act
E)  Truth in Lending ActF) A) and E)
G) D) and E)

Question 8

In the 5 Cs of credit,capacity refers to the borrower's financial ability to meet credit obligations.

Accepted Answer

A) True 
 B)False

Question 9

In the 5 Cs of credit,character refers to the borrower's attitude toward his or her credit obligations.

Accepted Answer

A) True 
 B)False

Question 10

Most of the information in your credit file may be reported for only ________ years.

Accepted Answer

A)  7
B)  9
C)  11
D)  13
E)  15F) D) and E)
G) All of the above

Question 11

Which federal law regulates the use of credit reports,requires the deletion of obsolete information,and gives consumers access to their file?

Accepted Answer

A)  Truth in Lending Act of 1969
B)  Fair Credit Billing Act of 1975
C)  Equal Credit Opportunity Act of 1975
D)  Fair Credit Reporting Act of 1971
E)  Fair Debit Collection Practices Act of 1978F) B) and D)
G) B) and C)

Question 12

A creditor may ignore your retirement income in rating your application.

Accepted Answer

A) True 
 B)False

Question 13

If your monthly net income is $1,250,what should be your maximum amount spent on credit payments?

Accepted Answer

A)  $125
B)  $250
C)  $375
D)  $500
E)  $600F) B) and E)
G) C) and D)

Question 14

What are the two basic types of credit? Give examples of both.

Accepted Answer

Two basic types of consumer credit are c...

Question 15

With closed-end credit,generally the seller holds the title to the merchandise until the payments have been completed.

Accepted Answer

A) True 
 B)False

Question 16

What are a few things to consider before you cosign a loan?

Accepted Answer

Here are a few things to consider befor...

Question 17

In the 5 Cs of credit,capacity refers to the borrower's attitude toward his or her credit obligations.

Accepted Answer

A) True 
 B)False

Question 18

Many banks extend a bank line of credit,which is also called:

Accepted Answer

A)  revolving check credit.
B)  a box of credit.
C)  convenience credit.
D)  installment credit.
E)  single lump-sum credit.F) B) and C)
G) C) and D)

Question 19

The Fair Credit Reporting Act,which regulates the use of credit reports,requires the deletion of obsolete information and gives consumers access to their files.

Accepted Answer

A) True 
 B)False

Question 20

If you cosign a loan,the creditor can collect this debt from you without first trying to collect from the borrower.

Accepted Answer

A) True 
 B)False

Exam 6: Introduction to Consumer Credit

A creditor may ignore your retirement income in rating your application.

Correct AnswerverifiedShow Answer

What do creditors look for when you apply for credit?

Correct AnswerverifiedCreditors determine credit wor...View AnswerShow Answer

Which federal law regulates the use of credit reports,requires the deletion of obsolete information,and gives consumers access to their file?

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,character refers to the borrower's attitude toward his or her credit obligations.

Correct AnswerverifiedShow Answer

If your monthly net income is $1,250,what should be your maximum amount spent on credit payments?

Correct AnswerverifiedShow Answer

A lender requires a cosigner even when a borrower meets the lender's criteria for making a loan.

Correct AnswerverifiedShow Answer

Amy Farmer is getting a loan to buy a used car.The bank wants to know the trade-in value of the car she is purchasing.Which of the 5 Cs of credit is the bank examining?

Correct AnswerverifiedShow Answer

If you cosign a loan,the creditor can collect this debt from you without first trying to collect from the borrower.

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,capacity refers to the borrower's attitude toward his or her credit obligations.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which federal consumer credit law prohibits creditors from requiring women to reapply for credit upon a change in marital status?

Correct AnswerverifiedShow Answer

What is consumer credit? What are its advantages and disadvantages?

Correct AnswerverifiedAnswers will vary.Consumer credit is th...View AnswerShow Answer

Most of the information in your credit file may be reported for only ________ years.

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,capacity refers to the borrower's financial ability to meet credit obligations.

Correct AnswerverifiedShow Answer

What are the two basic types of credit? Give examples of both.

Correct AnswerverifiedTwo basic types of consumer credit are c...View AnswerShow Answer

Many banks extend a bank line of credit,which is also called:

Correct AnswerverifiedShow Answer

Which federal consumer credit law requires "credit repair" companies to give consumers a written contract that can be canceled within three business days?

Correct AnswerverifiedShow Answer

With closed-end credit,generally the seller holds the title to the merchandise until the payments have been completed.

Correct AnswerverifiedShow Answer

What are a few things to consider before you cosign a loan?

Correct Answerverified Here are a few things to consider befor...View AnswerShow Answer

The Fair Credit Reporting Act,which regulates the use of credit reports,requires the deletion of obsolete information and gives consumers access to their files.

Correct AnswerverifiedShow Answer

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Creditors determine credit wor...
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Answers will vary.
Consumer credit is th...
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Correct Answer
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Correct Answer
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Two basic types of consumer credit are c...
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Correct Answer
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Correct Answer
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Correct Answer
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Here are a few things to consider befor...
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Correct Answer
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