Credit and Financial Terms Quiz

What is the definition of credit?

• The ability to obtain goods or services after payment

• The ability to obtain goods or services before payment

• The ability to obtain goods or services without payment

• The ability to obtain goods or services with immediate payment

What is a credit score based on?

• Income level

• Credit history and financial behaviors

• Education level

• Number of credit cards owned

What is a credit report?

• A report on stock market trends

• A detailed record of credit history and outstanding debts

• A record of personal achievements

• A summary of monthly expenses

What is the definition of interest rate?

• The fee charged for late payments

• The maximum amount of credit that a lender is willing to extend

• The percentage of the loan amount charged by the lender for the use of the money

• The amount of money borrowed or invested

What is secured credit backed by?

• No backing or collateral

• High income level

• Collateral such as a home or car

• Good credit history

What is revolving credit?

• A type of credit with fixed repayments

• A type of credit with continuous borrowing up to a certain limit

• A type of credit with no interest rate

• A type of credit with no credit limit

What is the credit utilization ratio based on?

• Number of late payments

• Annual income

• Credit card balances to credit limits ratio

• Number of credit accounts

What is the purpose of a credit limit?

• To restrict the amount of money a person can borrow

• To increase the interest rate

• To decrease the credit score

• To increase the number of credit cards a person can have

What is the impact of late payments on credit score?

• It has no impact

• It can increase the credit score

• It can decrease the credit score

• It can increase the credit limit

What is the role of a credit bureau?

• To provide credit counseling

• To issue credit cards

• To collect and maintain individual credit information and provide credit reports to potential lenders

• To set interest rates