Exam 6: Building and Maintaining Good Credit

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____ make both secured and unsecured small loans and require repayment on a monthly installment basis.

(Multiple Choice)
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Perhaps the greatest disadvantage of credit use is the

(Multiple Choice)
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Lending designed specifically for borrowers with low credit scores is called

(Multiple Choice)
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If you are unable to get completely out of debt every five years (except for a mortgage loan),you probably lean on debt too heavily.

(True/False)
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The ____ the APR,the ____ the true cost of the credit.

(Multiple Choice)
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The most commonly used forms of credit by consumers are loans and credit cards.

(True/False)
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Bankruptcy

(Multiple Choice)
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Lenders who focus primarily on borrowers with low credit scores make up the secondary lending market.

(True/False)
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You are seriously overindebted if your debt payments-to-disposable income ratio is

(Multiple Choice)
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Lenders are not allowed to discriminate among applicants.

(True/False)
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A debt-to-equity method provides a quick idea of one's financial solvency.The larger the ratio,the riskier the likelihood of repayment.A ratio in excess of 0.25 is considered high.

(True/False)
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The finance charge on a loan is simply the interest charged by the lender.

(True/False)
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Many offers for credit monitoring services are actually negative option plans that automatically sign you up for a credit reporting service.

(True/False)
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Experian,Equifax,and TransUnion are the three largest national groups of credit bureaus.

(True/False)
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Under the continuous-debt method of determining whether you are carrying too much debt you should be able to get out of all debt except mortgage debt completely within four years.

(True/False)
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A debt management plan is an arrangement whereby the consumer makes monthly payments that are distributed to each creditor.

(True/False)
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A discharged debtor cannot use Chapter 7 of the Bankruptcy Act again for at least six years.

(True/False)
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Credit cannot be used to own expensive products sooner.

(True/False)
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To protect your credit card privacy,which of the following is recommended?

(Multiple Choice)
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The higher your credit score the more you will pay for credit.

(True/False)
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