Exam 6: Building and Maintaining Good Credit

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

Perhaps the greatest disadvantage of credit use is the

Lending designed specifically for borrowers with low credit scores is called

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.

The ____ the APR,the ____ the true cost of the credit.

The most commonly used forms of credit by consumers are loans and credit cards.

Bankruptcy

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

You are seriously overindebted if your debt payments-to-disposable income ratio is

Lenders are not allowed to discriminate among applicants.

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.

The finance charge on a loan is simply the interest charged by the lender.

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

Experian,Equifax,and TransUnion are the three largest national groups of credit bureaus.

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.

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

A discharged debtor cannot use Chapter 7 of the Bankruptcy Act again for at least six years.

Credit cannot be used to own expensive products sooner.

To protect your credit card privacy,which of the following is recommended?

The higher your credit score the more you will pay for credit.