A
B
C
Question 1
Credit is an arrangement whereby
A
• You owe something, typically
money, or something is due.
• You receive goods, services,
or money in exchange for a
promise to repay at a later
date.
• You set money aside that you
can access quickly for
unexpected expenses.
Question 2
The opportunity cost of using credit is the
A
• Purchasing power of future
money for past purchases.
B
• The previous earning power
of money spent on interest
and fees.
C
• Current purchases, interest,
and fees.
Question 3
The type of credit that you get when a lender allows you to
borrow an amount for a specific purpose for a specific amount
of time at a given interest rate is called
A
• Installment/term credit.
B
• Noninstallment/service
credit.
C
• Revolving credit.
Question 4
The price that you pay for the use of money you borrow from a
lender is called
A
•Principal.
B
•Interest.
C
•Loan term.
Question 5
The annual percentage rate (APR) is
A
• The total cost of credit to the
lender.
B
• Finance charge expressed as
an monthly rate.
C
• The interest rate for the whole
year.
Question 6
A credit card is
A
• A type of credit that requires
full payment by a specified
date.
B
• A credit tool with a limited
number of monthly
transactions.
C
• A high-interest, revolving,
unsecured loan.
Question 7
A credit report is
A
• A summary of loan and bill
payments kept by a credit
bureau.
B
• A profile of your nationality,
educational attainment, and
credit obligations.
C
• An active data file kept by
the credit bureau for 10
years.
Question 8
Also known as your “financial GPA,” a credit score
is
A
• An annualized number that
measures how you handle
your financial obligations.
B
• A snapshot of your level of
risk to a lender at a specific
point in time.
C
• A single factor used to make
lending decisions.
Question 9
The two components that make up the greatest percentage
of the total credit score are
A
• Length of credit history and overall
credit.
B
• New credit and types of credit used.
C
• Payment history and amounts
owed.
Question 10
Having an accurate credit report is important because
A
• Positive information increases credit
opportunities and decreases the cost
of borrowing.
B
• Negative information reduces credit
opportunities, increases the cost of
borrowing, can impact service credit,
and can eliminate some job offers.
C
• All of the above.
Thank you for participating in
“Test Your Knowledge”