Exam 6: Building and Maintaining Good Credit

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If your credit card is lost or stolen or if you ever suspect fraudulent use of an account,you should contact each of the three national credit bureaus and have a "high-risk account holder" designation put on your file.

(True/False)
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Applicants with low credit scores are often only able to obtain credit in the subprime lending market.

(True/False)
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The three digit code on the back of a credit card that helps protect against unauthorized use of the card is called its card verification value.

(True/False)
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If your total debts exceed 33 percent of your net worth (equity)you are seriously overindebted.

(True/False)
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Which of the following is a court-sanctioned procedure by which a portion of your wages are set aside by your employer to pay a debt?

(Multiple Choice)
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Under a tiered pricing system,creditors charge lower interest rates to lower-risk borrowers.

(True/False)
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According to a recent study,approximately 5 percent of those applying for credit are turned down.

(True/False)
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The full additional cost of credit measured in dollars is called the

(Multiple Choice)
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The actual decision to grant credit is made by a credit bureau.

(True/False)
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Credit card blocking is the process whereby the merchant may notify the credit card issuer to put a hold on your account for the anticipated total amount of the charge.

(True/False)
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Taking on excessive debts early in life may compromise your goal of being financially successful.

(True/False)
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Signing up for a "free" credit monitoring service where you are automatically renewed on a fee basis unless you cancel at the end of the free period is an example of a negative option plan.

(True/False)
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The only truly free way to obtain your credit reports is through annualcreditreport.com.

(True/False)
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Convenience use of a credit card is justified only if the card balance is paid in full by the end of the year.

(True/False)
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A ____ on your credit report tells the credit bureau not to release your financial records to anyone without your consent.

(Multiple Choice)
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A factor in the development of credit scores is

(Multiple Choice)
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Credit bureaus compile information from

(Multiple Choice)
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The Fair Credit Reporting Act requires that reports contain accurate,relevant,and recent information,and that only bona fide users be permitted to review a file for approved purposes.

(True/False)
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Credit cards allow repeated use of credit as long as you make the minimum monthly payment.

(True/False)
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Credit is a term used to describe any situation in which goods,services,or money is received in exchange for a promise to repay at a future date.

(True/False)
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