Unit 2 - Financial Literacy

Which of the reports do banks and lenders use to determine if a borrower will receive a loan?

• Credit fraud

• Credit report

• Credit redistribution

• Credit relocation

Which of the following represents your ability to pay back loans properly?

• Credit worthiness

• Credit fraud

• Credit debt

• Credit redistribution

Which of the following is NOT one of the 3 C’s of credit?

• Character

• Collateral

• Capacity

• Capital

Which term matches this description:

-Payment History

-Debt to income ratio

-Recent credit application

-Amount of available credit

• Paperwork needed for a FAFSA

• Major life choices

• Basic components of a credit score

• Types of investment strategies

Which term matches this description:

- A loan that offers a borrower a fix amount of money over a specific period of time

• - Borrowers know upfront the number of monthly payments

• - Mortgages, car loans, student loans

• Open credit

• Installment credit

• Revolving credit

• Closed credit

Which term matches this description:

- Line of credit that remains available over time, even if you pay the full balance

- This type of credit can have a big impact on your credit score

• - Credit Cards

• Open credit

• Revolving credit

• Installment credit

• Closed credit

Which term matches this description:

• Loss of income

• Medical expenses

• Unaffordable home mortgage

• Spending beyond your means

• Cause of bankruptcy

• Reasons to use open credit

• Revolving credit

• Basic components of a credit score

Which term matches this description:

• - May prevent obtaining a loan

• - May trigger higher interest rates

- Lower credit score

- May hinder employment opportunities

• Cause of bankruptcy

• Reasons to use open credit

• Consequences of bankruptcy

• Basic components of a credit score

Which of the following is the legal process when a person or business is unable to pay debts?

• Default

• Consolidation

• Bankruptcy

• Devaluation

What are the two types of legally required insurances?

• Auto and homeowners’ insurance

• Health and auto insurance

• Life and health insurance

• Disability and renters’ insurance