FM * Managing Credit- Unit Test B

Front

What are the two most important factors in calculating your credit score?

Back

Payment history and total debt

Front

Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT…

Back

Applying for another credit card to use in case she runs out of cash paying off her debt

Front

Strategies to try before filing for Chapter 7 bankruptcy (EXCEPT one): Meeting with a credit counselor, Using a debt repayment strategy, like the Snowball or High Rate Method, Setting up a debt management plan.

Back

Paying a debt settlement company

Front

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

Back

Chapter 7 bankruptcy sells your assets; Chapter 13 bankruptcy allows you to keep assets if you follow a repayment plan.

Front

What is the single best way for someone with a low credit score to improve it?

Back

Make on-time payments

Front

Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal?

Back

Ask his parents to cosign a credit card or add him as an authorized user on their credit card

Front

How can debt increase a person’s net worth?

Back

Debt allows you to buy valuable assets, like a house

Front

Frank and Jasmine are each shopping for a new car and need a $20,000 loan over five years. Frank's credit score is 730, Jasmine's is 600. What is true about their loan payments?

Back

Jasmere's monthly payment on the loan will be about $100 more than Frank's payment

Front

What is the exception to illegal actions by a lender?

Back

Charge someone a high interest rate (above 20% APR) on a credit card

Front

What strategy should you use to pay off multiple sources of debt to pay the lowest amount of interest over time?

Back

High rate method