Question 1

If you are denied credit, your first step should be to:

Accepted Answer

A)  increase your income and decrease your spending. 
B)  reapply for credit. 
C)  hire an attorney and file a suit against the creditor. 
D)  check your credit file at the consumer bureau. 
E)  sue the credit bureau that provided the negative information.

Question 2

In the 5 Cs of credit, capacity refers to the borrower's financial ability to meet credit obligations.

Accepted Answer

A) True 
 B)False

Question 3

A credit arrangement that has no extra costs and no specific repayment plan is called:

Accepted Answer

A)  installment sales credit. 
B)  single lump-sum credit. 
C)  line of credit. 
D)  incidental credit. 
E)  revolving check credit.

Question 4

What should you do if your identity is stolen?

Accepted Answer

A)  Contact the fraud departments of each of the 3 major credit bureaus. 
B)  Ignore the problem and hope that it will go away. 
C)  Close all of your accounts and do not say anything to anyone. 
D)  Pay all the charges for which you are billed, even if they are not yours, so you can keep your credit accounts. 
E)  All of these

Question 5

Consumer credit dates back to colonial times.

Accepted Answer

A) True 
 B)False

Question 6

How can you protect yourself against debit/credit card fraud?

Accepted Answer

The answer of How can you protect yourself against debit/credit...

Question 7

What is consumer credit? What are its advantages and disadvantages?

Accepted Answer

The answer of What is consumer credit? What are its...

Question 8

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

Accepted Answer

A) True 
 B)False

Question 9

What would be the maximum limit for an individual's debt-to-equity ratio, excluding the home mortgage?

Accepted Answer

A)  0.50 
B)  0.33 
C)  1.00 
D)  2.00 
E)  2.25

Question 10

The Fair Credit Reporting Act 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 11

Consumer credit:

Accepted Answer

A)  is a privilege of the affluent. 
B)  dates back to colonial times. 
C)  carries no finance charge. 
D)  is not a major force in our economy. 
E)  use has been declining in recent years.

Question 12

With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.

Accepted Answer

A) True 
 B)False

Question 13

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 credit

Question 14

Jane Calvert is applying for a loan from a bank. The bank knows she owns a house worth $150,000 and a car with a trade-in value of $15,000 as well as other personal assets worth approximately $50,000. Which one of the 5 Cs of credit is the bank looking at?

Accepted Answer

A)  Character 
B)  Capacity 
C)  Capital 
D)  Collateral 
E)  Conditions

Question 15

A debit card:

Accepted Answer

A)  immediately deducts the cost of your purchase from your bank account. 
B)  credits your account at the moment you buy goods or services. 
C)  is a new type of a credit card issued by VISA International. 
D)  is another name for a travel and entertainment card. 
E)  typically has a credit limit of $1,000.

Question 16

Another name for closed-end credit is:

Accepted Answer

A)  a line of credit. 
B)  convenience credit. 
C)  revolving credit. 
D)  installment credit. 
E)  bank card credit.

Question 17

Which of the following federal consumer credit laws sets the procedures for promptly correcting billing errors?

Accepted Answer

A)  Fair Credit Reporting Act 
B)  Truth in Lending Act 
C)  Equal Credit Opportunity Act 
D)  Fair Credit Billing Act 
E)  Consumer Credit Reporting Reform Act

Question 18

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)  Conditions

Question 19

Which federal consumer credit law provides specific cost disclosure requirements for the annual percentage rate and the finance charge 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 Act

Question 20

The Equal Credit Opportunity Act is very specific about how a person's age may be used in credit decisions.

Accepted Answer

A) True 
 B)False

Exam 6: Introduction to Consumer Credit

If you are denied credit, your first step should be to:

In the 5 Cs of credit, capacity refers to the borrower's financial ability to meet credit obligations.

A credit arrangement that has no extra costs and no specific repayment plan is called:

What should you do if your identity is stolen?

Consumer credit dates back to colonial times.

How can you protect yourself against debit/credit card fraud?

What is consumer credit? What are its advantages and disadvantages?

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

What would be the maximum limit for an individual's debt-to-equity ratio, excluding the home mortgage?

The Fair Credit Reporting Act regulates the use of credit reports, requires the deletion of obsolete information, and gives consumers access to their files.

Consumer credit:

With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.

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?

Jane Calvert is applying for a loan from a bank. The bank knows she owns a house worth $150,000 and a car with a trade-in value of $15,000 as well as other personal assets worth approximately $50,000. Which one of the 5 Cs of credit is the bank looking at?

A debit card:

Another name for closed-end credit is:

Which of the following federal consumer credit laws sets the procedures for promptly correcting billing errors?

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?

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

The Equal Credit Opportunity Act is very specific about how a person's age may be used in credit decisions.