Question 1

Gordon Carey uses his Visa card to purchase a new digital camera and lens. What type of credit did Gordon use?

Accepted Answer

A)   Installment sales credit
B)   Installment cash credit
C)   Single lump sum credit
D)   Revolving credit
E)   Incidental creditF) A) and B)
G) B) and D)

Question 2

Which FICO credit score would represent the least risky borrower?

Accepted Answer

A)   415
B)   562
C)   685
D)   702
E)   825F) B) and D)
G) A) and B)

Question 3

A valuable asset pledged to assure loan payments and subject to seizure upon default is called:

Accepted Answer

A)   capacity.
B)   character.
C)   capital.
D)   collateral.
E)   conditions.F) All of the above
G) B) and E)

Question 4

If your monthly net (after-tax)  income is $1,500, what should be your maximum amount spent on credit payments?

Accepted Answer

A)   $200
B)   $300
C)   $400
D)   $500
E)   $600F) C) and D)
G) B) and E)

Question 5

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Accepted Answer

A) True 
 B)False

Question 6

Which federal law limits a cardholder's liability for unauthorized use of a card to $50?

Accepted Answer

A)   Truth in Lending Act
B)   Fair Credit Reporting Act
C)   Fair Credit Billing Act
D)   Equal Credit Opportunity Act
E)   Fair Debt Collection Practices ActF) A) and D)
G) C) and E)

Question 7

Most of the information in your credit file may be reported for only ______ years.

Accepted Answer

A)   7
B)   9
C)   11
D)   13
E)   15F) B) and C)
G) C) and D)

Question 8

The borrower's attitude toward his or her credit obligations is called:

Accepted Answer

A)   capacity.
B)   capital.
C)   character.
D)   collateral.
E)   conditions.F) B) and D)
G) C) and E)

Question 9

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Accepted Answer

A)   Fair Debt Collection Practices Act
B)   Equal Credit Opportunity Act
C)   Fair Credit Billing Act
D)   Fair Credit Reporting Act
E)   Truth in Lending ActF) A) and D)
G) All of the above

Question 10

Which one of the following would not be a good use of a home equity loan?

Accepted Answer

A)   Paying for college
B)   Buying a new boat
C)   Putting a new roof on your house
D)   Paying medical bills
E)   Adding a deck on the back of your houseF) A) and B)
G) None of the above

Question 11

Mike Cook has been receiving calls at work every two hours from a collection company that is trying to collect a past due loan from him. He believes this is harassment and that the collections company is not allowed to do this. Which consumer protection law provides protection from this type of harassment?

Accepted Answer

A)   Fair Credit Reporting Act
B)   Fair Credit Billing Act
C)   Equal Credit Opportunity Act
D)   Fair Debt Collection Practices Act
E)   Truth in Lending ActF) C) and E)
G) B) and E)

Question 12

If you have a problem with your creditor, the best solution is to:

Accepted Answer

A)   file a lawsuit against the creditor.
B)   solve your problem directly with the creditor.
C)   complain to the Federal Reserve System.
D)   complain to the Board of Governors.
E)   wait for creditor action.F) A) and D)
G) A) and C)

Question 13

The Fair Credit Billing Act sets the procedures for promptly correcting billing errors.

Accepted Answer

A) True 
 B)False

Question 14

The debt payments-to-income ratio is:

Accepted Answer

A)   calculated by dividing total liabilities by net worth.
B)   calculated by dividing monthly debt payments (not including house payments)  by net monthly income.
C)   determined by dividing your assets by your liabilities.
D)   a useless ratio for determining your credit capacity.
E)   rarely used by creditors in determining credit worthiness.F) A) and D)
G) A) and E)

Question 15

You should sign your new credit cards as soon as they arrive.

Accepted Answer

A) True 
 B)False

Question 16

If you have a complaint against The First National Bank of Edmond, who should you contact?

Accepted Answer

A)   National Credit Union Association
B)   Federal Trade Commission
C)   Federal Reserve System
D)   Comptroller of the Currency
E)   Bank Vice-PresidentF) A) and D)
G) A) and E)

Question 17

The debt-to-equity ratio is calculated by dividing your monthly debt payments (not including house payments) by your net worth.

Accepted Answer

A) True 
 B)False

Question 18

The credit cardholders who pay off their balances in full each month are known as convenience users.

Accepted Answer

A) True 
 B)False

Question 19

If you cosign, the creditor can collect this debt from you without first trying to collect from the borrower.

Accepted Answer

A) True 
 B)False

Question 20

Which federal consumer credit law regulates the advertising of credit terms?

Accepted Answer

A)   Fair Debt Collection Practices Act
B)   Equal Credit Opportunity Act
C)   Fair Credit Billing Act
D)   Fair Credit Reporting Act
E)   Truth in Lending ActF) B) and C)
G) C) and E)

Exam 6: Introduction to Consumer Credit

If your monthly net (after-tax) income is $1,500, what should be your maximum amount spent on credit payments?

Correct Answer
verified

If you have a problem with your creditor, the best solution is to:

Correct Answer
verified

Gordon Carey uses his Visa card to purchase a new digital camera and lens. What type of credit did Gordon use?

Correct Answer
verified

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Correct Answer
verified

Which one of the following would not be a good use of a home equity loan?

Correct Answer
verified

The Fair Credit Billing Act sets the procedures for promptly correcting billing errors.

Correct Answer
verified

A valuable asset pledged to assure loan payments and subject to seizure upon default is called:

Correct Answer
verified

The debt-to-equity ratio is calculated by dividing your monthly debt payments (not including house payments) by your net worth.

Correct Answer
verified

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Correct Answer
verified

The debt payments-to-income ratio is:

Correct Answer
verified

Correct Answer
verified

The credit cardholders who pay off their balances in full each month are known as convenience users.

Correct Answer
verified

The borrower's attitude toward his or her credit obligations is called:

Correct Answer
verified

You should sign your new credit cards as soon as they arrive.

Correct Answer
verified

Which FICO credit score would represent the least risky borrower?

Correct Answer
verified

Most of the information in your credit file may be reported for only ______ years.

Correct Answer
verified

Which federal consumer credit law regulates the advertising of credit terms?

Correct Answer
verified

Which federal law limits a cardholder's liability for unauthorized use of a card to $50?

Correct Answer
verified

If you cosign, the creditor can collect this debt from you without first trying to collect from the borrower.

Correct Answer
verified

If you have a complaint against The First National Bank of Edmond, who should you contact?

Correct Answer
verified

Exam 6: Introduction to Consumer Credit

If your monthly net (after-tax) income is $1,500, what should be your maximum amount spent on credit payments?

Correct AnswerverifiedShow Answer

If you have a problem with your creditor, the best solution is to:

Correct AnswerverifiedShow Answer

Gordon Carey uses his Visa card to purchase a new digital camera and lens. What type of credit did Gordon use?

Correct AnswerverifiedShow Answer

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Correct AnswerverifiedShow Answer

Which one of the following would not be a good use of a home equity loan?

Correct AnswerverifiedShow Answer

The Fair Credit Billing Act sets the procedures for promptly correcting billing errors.

Correct AnswerverifiedShow Answer

A valuable asset pledged to assure loan payments and subject to seizure upon default is called:

Correct AnswerverifiedShow Answer

The debt-to-equity ratio is calculated by dividing your monthly debt payments (not including house payments) by your net worth.

Correct AnswerverifiedShow Answer

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Correct AnswerverifiedShow Answer

The debt payments-to-income ratio is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The credit cardholders who pay off their balances in full each month are known as convenience users.

Correct AnswerverifiedShow Answer

The borrower's attitude toward his or her credit obligations is called:

Correct AnswerverifiedShow Answer

You should sign your new credit cards as soon as they arrive.

Correct AnswerverifiedShow Answer

Which FICO credit score would represent the least risky borrower?

Correct AnswerverifiedShow Answer

Most of the information in your credit file may be reported for only ______ years.

Correct AnswerverifiedShow Answer

Which federal consumer credit law regulates the advertising of credit terms?

Correct AnswerverifiedShow Answer

Which federal law limits a cardholder's liability for unauthorized use of a card to $50?

Correct AnswerverifiedShow Answer

If you cosign, the creditor can collect this debt from you without first trying to collect from the borrower.

Correct AnswerverifiedShow Answer

If you have a complaint against The First National Bank of Edmond, who should you contact?

Correct AnswerverifiedShow Answer

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