Wise Financial Literacy Test Prep (Part 3 of 4)

Front

What type of information is not found on a consumer’s credit report? Options: A. Personal medical information, B. Criminal records, C. Employment history, D. Current and past addresses.

Back

Personal medical information.

Front

Hillary and Stephanie have both borrowed $15,000 from the same bank to buy the same model of a new car. Hillary's credit score is 732 and Stephanie's credit score is 588. Who is likely to pay a lower finance charge?

Back

Hillary.

Front

Choose the best suggestion for building and maintaining a good credit score: A. Have money in savings and protect against identity theft. B. Keep debt low and pay bills on time. C. Make safe investments and set clear financial goals. D. Comparison shop and follow a budget.

Back

Keep debt low and pay bills on time.

Front

What is true about loans? A. The lower the APR, the more interest is paid. B. The larger the down payment, the lower the principal. C. The shorter the length of the loan, the smaller the payments. D. The higher the APR, the less interest is paid.

Back

The larger the down payment, the lower the principal.

Front

An example of identity theft is when an individual

Back

uses another person’s information to open an account.

Front

It is generally a good idea to borrow money and repay the amount borrowed with future income when a person needs to buy a car to get a much better paying job.

Back

a person needs to buy a car to get a much better paying job.

Front

If a person is behind on his debt payments and goes to a responsible credit counseling service, what help is likely to be offered?

Back

They can work with those who loaned him money to set up a realistic payment schedule.

Front

Who is likely to pay the lowest finance charge: Scott, who borrowed $6,000 for an overseas vacation, or Eric, who borrowed $6,000 to buy a truck?

Back

Eric will pay less because the truck is collateral for the loan.

Front

An arrangement to receive cash, goods or services now and pay for them in the future is called

Back

credit.

Front

The rate imposed by the lender for the borrower to pay on a loan is known as

Back

annual percentage rate (APR).