PF 04 Credit Outcome Assessment - Types of Credit

Which two factors have the greatest impact on your credit score?

• Credit utilization and types of credit

• Payment history and amounts owed

• New credit inquiries and length of credit history

• Types of credit and payment history

Ethan is reviewing his credit report to ensure everything is accurate. All of the following would show up on his credit report, EXCEPT...

• Salary of his current job

• Payment history of his car loan

• Credit card payment history

• Student loan activity

How does having a high credit score benefit you when applying for a car loan?

• Securing a lower monthly payment

• Reducing the need for a co-signer

• Qualifying for a lower interest rate

• Increasing the car's resale value

Grace is planning to apply for a loan to buy a new car. How can her credit score impact her financial well-being?

• Only consumers with high scores are approved for credit

• Consumers with low scores get lower interest rates on loans than those with high scores

• Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be

• It generally has no impact on your financial situation

Sarah is considering taking out a $15,000 loan for a new motorcycle. She plans to repay it over a five-year term. Sarah's credit score is 715. Based on her credit score, what will her APR and Monthly Payment be?

Which of the following is a characteristic of secured loans?

• They are typically used for unsecured credit cards

• The lender can seize the collateral if payments are not made

• The borrower is not at risk of losing any assets in case of default

• They generally have higher interest rates than unsecured loans

7. Which of the following is most likely to represent a fixed rate, secured debt?

• A student loan
• A credit card
• A prepaid debit card
• An auto loan

Jessica is planning to buy a new car and has $6000 saved for a down payment, while still maintaining her emergency fund. The car she wants is priced at $40,000. To minimize her monthly payments, what should she do?

• Put in $0 for your down payment, and choose a loan with a short term length

• Put in $3000 for your down payment, and choose a loan with a short term length

• Put in $4000 for your down payment, and choose a loan with a long term length

• Put in $6000 for your down payment, and choose a loan with a long term length

What is a down payment?

What is a key benefit of starting to build your credit score at a young age?

• You can avoid paying any interest on loans

• It helps in securing better interest rates for future loans

• You can get unlimited credit cards without any fees

• Credit scores are automatically higher for younger individuals