Credit Review

What is one disadvantage of an auto title loan/car loan?

• The interest rate can be raised if payments are not made on time

• The car can be repossessed if payments are not made one time

• The car purchased with a loan depreciates in value and therefore can not be resold for as much

• The car cannot be used until the loan is paid back in full

Definition of Credit Utilization: amount of credit a person uses on credit cards and other lines of credit (not including student loans, mortgages, or auto loans)

How does credit utilization impact your ability to get a loan?

• Higher level of credit utilization = higher odds of obtaining new credit

• Higher level of credit utilization = improved credit score

• Lower level of credit utilization = easier to qualify for a loan

• Lower level of credit utilization = harder to qualify for a loan

True or False: A fixed mortgage rate is more consistent than a variable mortgage rate

• True

• False

What is similar about a conventional loan and a government backed loan?

• Both always require a down payment

• Both are money that comes from taxpayers

• Both are supported by the Federal Government

• Both have to be paid back

Why is renting more advantageous than owning a home?

• You do not have to cover maintenance and repair costs

• You can move more freely

• You can have more of a say in how your residence looks

• You can build long term wealth

Why is owning a home more advantageous than renting?

• You can be more closely tied to your property

• You can avoid maintenance and repair fees

• You can have more of a say in how your residence looks

• You can pay less in taxes to have children attend the local school

Why would the amount one owes to a credit card company grow despite making the minimum monthly payment?

• It is being subjected to a monthly maintenance fee

• It is racking up interest because the balance is not fully paid yet

• It is being charged a fee for only making the minimum monthly payment

• It is being charged a monthly fee just for having the credit card

What is the most effective way to build a good credit score?

• Having only a few lines of credit

• Continuously reviewing your credit score

• Having numerous lines of credit

• Consistent payment history

What is the best way to show you can manage debt?

• By reaching out to credit agencies

• By acquiring a new line of credit

• Make payments on time

• Receiving a payday loan

What is similar about a payday loan and a pawn shop?

• Both require collateral

• Both provide short-term loans

• Both offer zero interest rate

• Both have no limit on the amount that can be loaned