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48 Cards in this Set

  • Front
  • Back
When did installment credit explode on the North American scene?
with the advent of the automobile in the early 1900s
The 25-44 age group currently represents about 30% of the population but holds nearly ___ percent of debt outstanding
60
Although credit permits more immediate satisfaction of needs and desires, it
does not increase total purchasing power
By paying cash for a purchase, you
gorgo the opportunity to keep the cash in an interest-bearing account
Another name for credit when loans are made on a continuous basis and borrower is billed periodically for at least partial payment is known as:
revolving credit
Which of the following is not an example of a consumer loan?
revolving credit
A common ex. Of a consumer loan is
a mortgage loan
Which of the following is not an ex. Of revolving credit
auto loan
The max. amount of credit you are allowed by a creditor is called a(n)
line of credit
An installment loan is a
loan that allows you to receive merchandise such as a refrigerator or furniture
A good ex. Of an open-end credit is
the use of a bank credit card to make a purchase
A credit arrangement that has no extra costs and no specific repayment plan is called
incidental credit
A personal line of credit
prearranged loan for a specified amount that you can use by writing a special check
Which of these is not a true statement? To avoid online fraud, you should _______
give your password only to your internet service provider
Which of these is not a characteristic of PayPal?
no annual fees
Which of these is not a financing option for the purchase of a car?
line of credit
In determining your credit capacity, you first provide for basic necessities, such as
mortgage or rent
Experts suggest that you spend no more than ___ percent of your net income on credit purchases
20
If you cosign a loan
you’ll have to pay up the full amount of the debt if the borrower does not pay
Debt payments-to-income ratio is
calculated by dividing monthly debt payments (not including house payments) y net monthly income
Debt-to-equity ratio is
calculated by dividing your assets by liabilities
Which of the following agencies can produce for a subscribing creditor, almost instantaneously, a report about your past and present credit activity?
a credit bureau
What can be included in your credit report?
employer
Most of the info in you credit file may be reported for only ___ years
7
If there is incorrect info in your credit file
the credit bureau must reinvestigate and modify or remove inaccurate data
Kathy purchased a $2000 digital TV from young’s appliances. She will make 12 equal payments over the next year to pay for it. She is using:
an installment loan
If you have incorrect info in your credit file
there are legal remedies avail. To you
The best way to maintain your credit rating is to
repay your debts on time
The borrower’s attitude toward his or her credit obligations is called
character
The borrower’s financial ability to meet credit obligations is called
capacity
A term that refers to the borrower’s assets or net worth is called
capital
A loan officer is examining your income and the amount of your existing debt payments to help in the decision to make a loan to you today. Which aspect of the Five C’s of lending is the loan officer most likely looking at?
capacity
If you are a women, a creditor must
consider income from your part-time employment
In evaluating your credit application, a lender may
ask your age
If your credit application is denied, you
should ask to know specifically why
If you think that your bill is wrong, you should first
notify the creditor of the error
Which of the following is considered to be a consumer loan?
personal line of credit
When a creditor looks at the borrower’s attitude toward credit obligations, which of the 5 C’s of credit is she analyzing?
character
Valid reasons for using credit include all of the following except
borrow for everyday living expenses
Questions you should consider before you decide how and when to make a major purchase include all except
all of these questions should be considered
The advantages of credit incl.
all of these are adv
Which of the following is not an example of revolving credit?
mortgage
What % of Canadian housholds carry 1 or more credit cards?
more than 80%
What % of credit card users generally pay off their balance in full every month?
70%
If you cosign a loan, all of the following are true except
you’ll have to pay only a portion of the debt if the borrower does not pay
Which of the following is the best rating to have on your credit report?
R1
Which of the following is the worst rating to have on your credit report?
R9
FICO scores range between
300-900