COOP - Credit Test

An installment loan is one in which you agree to make monthly payments in specific amounts over a period of time

true

car loans, mortgage loans and credit cards all have the same interest rate

false

if you cannot pay your bills, the last thing you should do is contact the creditor

false

the most important thing that Mr. Grigg will teach you all semester is not to ruin your debt/income ratio

true

it is illegal for a state or local government to purchase goods on credit

false

a person’s reputation for paying bills on time is known as collateral

false

a credit application is a business or individual who is willing and able to provide information about your creditworthiness

false

the APR includes both service charges and interest

true

the consumer credit reporting reform act places the burden of proof for accurate credit information on you rather than the credit reporting company

false

you are not allowed to pay your own student loans while you are still attending college

false

the cost of using someone else’s money is called interest

true

simple interest =

P x R x T

your honesty and willingness to pay a debt when it is due

character

this law or act states companies must correct billing mistakes in a timely fashion

fair credit billing act

the creditor’s belief that the debtor will honor the promise to pay later for goods and services that have already been received and used

trust

A _____ has your account numbers on it and is a written form that acknowledges that payment was made

loan receipt

the ratio that college kids ruin and cant buy a house is called the…

debt/income ratio

businesses or individuals from whom you have received credit in the past and/or who can help verify your credit record

credit references

which of the following is NOT a provision of the Equal Credit Opportunity Act

prevents creditors from looking into your creditworthiness

which loan usually comes with a better interest rate

secured loan

if you cannot pay your bills you should never

respond to an ad claiming to “erase bad credit”

which of the following is not one of the 3 C’s of credit

credit reference

a credit plan that allows purchases to be charged at any time but requires that at least part of the debt be repaid each month

revolving charge account

the R in the simple interest formula stands for what

rate

which of the following require disclosure of the APR

both a and b

the truth-in-lending-law limits your liability to ___ for unauthorized credit card purchases made prior to notifying the card issuer

$50

the date on which a loan must be repaid in full

maturity date

property that is offered as security for some loan agreements

collateral

a _____ can help you make money with cash back incentives

credit card

the percentage cost of credit on a yearly basis is

annual percentage rate

one who buys on credit or receives a loan

debtor

which of the following is an example of a bank card

mastercard

your ability to pay a debt when it is due

capacity

a ______ is an initial payment of part of the purchase price that is made as part of a credit agreement

down payment

______ is a special insurance that repays the balance of the amount owed if the borrower dies. you should never buy this insurance

credit life insurance

a _____ is someone who becomes responsible for payment of the note if the debtor does not pay as promised

cosigner

a company that gathers information on credit users and sells it to businesses that offer credit is called

credit bureau

anyone who buys on credit is called

debtor

a statement will report all of the following information except

whether the item was purchased on sale

T in simple interest formula stands for time. time is expressed in what

years

a type of loan in which the lender has the right to sell property used as collateral to get back the amount of the loan in the event the loan is not repaid is an

secured loan

what figure can car salesman use to make a deal look good

monthly payment

a company that attempts to obtain money that is past due is called

debt collection agency

this regulation requires that you be told the cost of credit before signing an agreement

truth-in-lending law

a maximum amount you are allowed to owe at one time on your credit account is called

credit limit

which of the following will not help you to establish a good record of creditworthiness

changing jobs very frequently

which of the following is a disadvantage of using credit

overbuying

a car loan is a great example of an

installment loan

a written promise to repay based on debtor’s excellent credit history is an

promissory note

the value of the borrower’s possessions

capital