Financial Algebra Benchmark Review Part 1

Front

What are the benefits of having a cosigner on a loan?

Back

Having a cosigner with good credit increases the chances of loan approval and can lead to a lower interest rate.

Front

What is a true statement about bankruptcy?

Back

Bankruptcy significantly decreases your credit score.

Front

What is the Debt Snowball method for paying off debt?

Back

The Debt Snowball method involves making minimum payments on all debts and putting any extra cash toward the debt with the lowest balance.

Front

What should Theo try before filing for Chapter 7 bankruptcy?

Back

Theo should meet with a credit counselor, use a debt repayment strategy, and set up a debt management plan, but he should avoid paying a debt settlement company.

Front

What is the role of a credit counselor?

Back

A credit counselor provides low-cost financial advice and creates debt management plans.

Front

What is the impact of bankruptcy on your credit report?

Back

Bankruptcy stays on your credit report for several years, affecting your creditworthiness.

Front

What is the purpose of a debt management plan?

Back

A debt management plan helps individuals manage their debts by consolidating payments and negotiating with creditors.

Front

What is the difference between Chapter 7 and Chapter 13 bankruptcy?

Back

Chapter 7 bankruptcy involves liquidating assets to pay off debts, while Chapter 13 allows individuals to keep their assets and repay debts over time.

Front

What is a credit score?

Back

A credit score is a numerical representation of a person's creditworthiness, based on their credit history.

Front

What are the consequences of late loan payments?

Back

Late loan payments can lead to penalties, increased interest rates, and a negative impact on your credit score.