Question 1

The smaller the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

Accepted Answer

A) True 
 B)False

Question 2

Jennifer Garner purchases a sofa,love seat and reclining chair for her family room and will make payments of $65 per month for the next twenty-four months.What type of credit did Jennifer use?

Accepted Answer

A)  Installment sales credit
B)  Installment cash credit
C)  Single lump-sum credit
D)  Revolving credit
E)  Incidental creditF) B) and E)
G) A) and B)

Question 3

Jennifer Rogers needs a loan to purchase a new car.She knows the creditor must:

Accepted Answer

A)  ask about how many children she plans on having.
B)  consider whether she has a telephone in her own name.
C)  evaluate her on the same basis as applicants who are male.
D)  require her husband to cosign the loan.
E)  ask about her birth control methods.F) B) and C)
G) A) and D)

Question 4

If you want to improve your credit score,then you should:

Accepted Answer

A)  get copies of your credit report.
B)  pay your bills on time.
C)  make sure you understand how your credit score is determined.
D)  beware of credit-repair scams.
E)  do all of these things.F) B) and E)
G) D) and E)

Question 5

What can be included in your credit bureau file?

Accepted Answer

A)  Race
B)  Nationality
C)  Sex
D)  Marital status
E)  ReligionF) A) and D)
G) A) and E)

Question 6

Credit bureaus obtain data from which of the following?

Accepted Answer

A)  Banks
B)  Finance companies
C)  Merchants
D)  Credit card companies
E)  All of theseF) A) and B)
G) A) and C)

Question 7

Charles Rickman is applying for a loan from the bank.The bank has determined that he has never been late making payments on past loans.Which of the 5 Cs of credit is the bank looking at?

Accepted Answer

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

Question 8

If you think that your bill is wrong,you should first:

Accepted Answer

A)  contact the local credit bureau and inform it of the billing error.
B)  complain to the Better Business Bureau.
C)  contact your state consumer protection agency.
D)  call the creditor to discuss the error.
E)  contact your attorney to settle the matter.F) B) and E)
G) D) and E)

Question 9

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 10

If you dispute the accuracy of information in your credit file:

Accepted Answer

A)  you should sue the credit bureau.
B)  the credit bureau has no power to change it.
C)  the credit bureau must reinvestigate and modify or remove inaccurate data.
D)  you must wait at least six months prior to launching an investigation.
E)  you have no means of correcting it.F) None of the above
G) C) and D)

Question 11

If you have a complaint about consumer credit,you should first:

Accepted Answer

A)  try to solve your problem directly with the creditor.
B)  contact your attorney.
C)  file a complaint with the Better Business Bureau.
D)  report it to the state consumer protection agency.
E)  complain to the Federal Reserve Bank in your district.F) All of the above
G) B) and D)

Question 12

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 D)
G) A) and B)

Question 13

Which federal consumer credit law provides specific cost disclosure requirements for the annual percentage rate and the finance charges as a dollar amount?

Accepted Answer

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

Question 14

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

Question 15

Karen Price is 55 years old,divorced,and has worked at her current job for five years.She is interested in looking at her credit report.Which of the following pieces of information should she find in this report?

Accepted Answer

A)  The address of the house she lived in as a child
B)  A loan for furniture she paid off 12 years ago
C)  The outstanding balance on the Visa card she has today
D)  The names and addresses of her grown children
E)  The fact that she was late paying her electric bill 8 years agoF) C) and D)
G) A) and D)

Question 16

Revolving check credit is a:

Accepted Answer

A)  credit arrangement that has no extra costs.
B)  prearranged loan for a specified amount that you can use by writing a special check.
C)  credit arrangement that has no specific repayment plan.
D)  synonym for installment cash credit.
E)  synonym for single lump-sum credit.F) A) and D)
G) B) and E)

Question 17

You may not be denied credit because you receive Social Security or public assistance.

Accepted Answer

A) True 
 B)False

Question 18

Michael Flowers believes that his credit card company has made an error in its monthly statement to him.Which consumer protection law specifies procedures he can use to dispute this monthly statement?

Accepted Answer

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

Question 19

Maryann Lawrence wants to get a loan in just her name.She knows the creditor cannot:

Accepted Answer

A)  refuse her credit if she is creditworthy.
B)  consider income from her part-time job.
C)  consider the payment history of all her joint accounts.
D)  consider alimony payments she receives from her ex-husband.
E)  consider child support payments she receives from her ex-husband.F) A) and C)
G) C) and E)

Question 20

Which federal consumer credit law limits a cardholder's liability for unauthorized use of a card to $50?

Accepted Answer

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

Exam 6: Introduction to Consumer Credit

Jennifer Rogers needs a loan to purchase a new car.She knows the creditor must:

Correct AnswerverifiedShow Answer

If you have a complaint about consumer credit,you should first:

Correct AnswerverifiedShow Answer

Charles Rickman is applying for a loan from the bank.The bank has determined that he has never been late making payments on past loans.Which of the 5 Cs of credit is the bank looking at?

Correct AnswerverifiedShow Answer

Karen Price is 55 years old,divorced,and has worked at her current job for five years.She is interested in looking at her credit report.Which of the following pieces of information should she find in this report?

Correct AnswerverifiedShow Answer

If you want to improve your credit score,then you should:

Correct AnswerverifiedShow Answer

Revolving check credit is a:

Correct AnswerverifiedShow Answer

Maryann Lawrence wants to get a loan in just her name.She knows the creditor cannot:

Correct AnswerverifiedShow Answer

The smaller the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

Correct AnswerverifiedShow 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

Michael Flowers believes that his credit card company has made an error in its monthly statement to him.Which consumer protection law specifies procedures he can use to dispute this monthly statement?

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

Which federal consumer credit law limits a cardholder's liability for unauthorized use of a card to $50?

Correct AnswerverifiedShow Answer

Jennifer Garner purchases a sofa,love seat and reclining chair for her family room and will make payments of $65 per month for the next twenty-four months.What type of credit did Jennifer use?

Correct AnswerverifiedShow Answer

If you think that your bill is wrong,you should first:

Correct AnswerverifiedShow Answer

What can be included in your credit bureau file?

Correct AnswerverifiedShow Answer

Which federal consumer credit law provides specific cost disclosure requirements for the annual percentage rate and the finance charges as a dollar amount?

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 dispute the accuracy of information in your credit file:

Correct AnswerverifiedShow Answer

Credit bureaus obtain data from which of the following?

Correct AnswerverifiedShow Answer

You may not be denied credit because you receive Social Security or public assistance.

Correct AnswerverifiedShow Answer

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