Exam 6: Using Credit

Credit bureaus provide information about prospective borrowers.

Chapter 7 bankruptcies can remain in your credit file for up to 10 years.

Auto loans are an example of open account credit since you can add to the debt when you purchase another vehicle.

The intent of the Wage Earner Plan is to provide an alternative to straight bankruptcy.

Interest will almost always begin to accrue immediately when you use a bank credit card to

Paying only the minimum payment each time on a credit card usually enables one to pay off the balance fairly quickly.

To establish creditworthiness you probably should first

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Nancy's take-home income is $3,000 per month,and she currently has $700 of monthly consumer debt payments.According to the general rules of thumb,Nancy [is | is not] in a position to take on additional consumer debt.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A credit scoring system might assign points according to your annual income and [gender | age].

Chapter 7 bankruptcy will

For someone with a good credit rating,lenders will typically lend up to 100% of equity in a home using a home equity credit line.

A debt safety ratio of 15% would generally be a signal of financial trouble ahead.

Unsecured lines of credit provide tax advantages if you itemize deductions.

You have a $926 balance on your credit card account.The minimum payment on your account is 2 percent of the latest balance or $20,whichever is greater.What will be the minimum payment this month?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Student credit cards usually [do | do not] require parental or guardian guarantees.

Rebate credit cards work best for those who use the rebates,charge a lot,and do not carry high monthly balances.

College students without verifiable income cannot be issued credit cards.

Having arranged and fully repaid a small loan should help improve creditworthiness.

Generally speaking,the interest rates on credit cards are lower than any other form of credit.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Rebate cards are most useful for consumers who charge a lot and [maintain | do not maintain] large balances on their cards.