Question 1

What percentage of consumers are rated super prime based on the VantageScore?

Accepted Answer

A)  16%
B)  20%
C)  25%
D)  9%
E)  19%F) A) and E)
G) A) and D)

Question 2

What percentage of consumers are rated high risk based on the VantageScore?

Accepted Answer

A)  16%
B)  20%
C)  25%
D)  9%
E)  19%F) All of the above
G) A) and B)

Question 3

What would your credit rating be if you are declare bankruptcy?

Accepted Answer

A)  R5
B)  R2
C)  R6
D)  R7
E)  R9F) B) and D)
G) C) and D)

Question 4

What percentage of credit card users generally pay off their balance in full every month?

Accepted Answer

A)  20%
B)  30%
C)  50%
D)  70%
E)  more than 80%F) B) and C)
G) All of the above

Question 5

Collateral refers to the borrower's assets or net worth.

Accepted Answer

A) True 
 B)False

Question 6

A line of credit is considered a form of revolving credit.

Accepted Answer

A) True 
 B)False

Question 7

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Accepted Answer

A) True 
 B)False

Question 8

The debt-to-equity ratio is calculated by dividing your total liabilities by your net worth.

Accepted Answer

A) True 
 B)False

Question 9

Using a credit card, such as Visa or MasterCard is an example of closed-end credit.

Accepted Answer

A) True 
 B)False

Question 10

There are _________ main credit bureaus in Canada

Accepted Answer

A)  1
B)  2
C)  3
D)  5
E)  8F) All of the above
G) A) and B)

Question 11

The larger the debt-to-equity ratio, the riskier the situation is for lenders and borrowers.

Accepted Answer

A) True 
 B)False

Question 12

If your put a trip on your credit card that charges you an APR of 19.99% and make the minimum monthly payment of $45 how long will it take to pay off the credit card debt (in months) ?

Accepted Answer

A)  24
B)  36
C)  49
D)  60
E)  96F) None of the above
G) B) and C)

Question 13

What is the maximum home equity line of credit that can be obtained (as a percentage) ?

Accepted Answer

A)  45%
B)  50%
C)  65%
D)  75%
E)  25%F) A) and B)
G) All of the above

Question 14

The best way to maintain your credit rating is to

Accepted Answer

A)  use credit sparingly.
B)  pay cash for your purchases.
C)  repay your debts on time.
D)  declare a Chapter 7 bankruptcy.
E)  use as many credit cards as you can.F) All of the above
G) A) and E)

Question 15

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Accepted Answer

A) True 
 B)False

Question 16

A FICO score of 700 would be considered

Accepted Answer

A)  poor
B)  very poor
C)  a risk to default
D)  very good
E)  fairF) A) and B)
G) B) and E)

Question 17

A home equity loan is based only on the amount you still owe on your mortgage.

Accepted Answer

A) True 
 B)False

Question 18

Kathy purchased a $2,000 digital TV from Young's Appliances.She will make 12 equal payments over the next year to pay for it.She is using:

Accepted Answer

A)  an installment loan
B)  open-end credit
C)  revolving check credit
D)  a line of credit
E)  none of the aboveF) A) and C)
G) A) and D)

Question 19

What would your credit rating be if you have merchandise repossessed?

Accepted Answer

A)  R5
B)  R8
C)  R6
D)  R7
E)  R9F) A) and B)
G) A) and C)

Question 20

The credit cardholders who pay off their balances in full each month are known as convenience users.

Accepted Answer

A) True 
 B)False

Exam 5: Introduction to Consumer Credit

Collateral refers to the borrower's assets or net worth.

Correct AnswerverifiedShow Answer

Using a credit card, such as Visa or MasterCard is an example of closed-end credit.

Correct AnswerverifiedShow Answer

A line of credit is considered a form of revolving credit.

Correct AnswerverifiedShow Answer

A FICO score of 700 would be considered

Correct AnswerverifiedShow Answer

What percentage of credit card users generally pay off their balance in full every month?

Correct AnswerverifiedShow Answer

What percentage of consumers are rated high risk based on the VantageScore?

Correct AnswerverifiedShow Answer

What is the maximum home equity line of credit that can be obtained (as a percentage) ?

Correct AnswerverifiedShow Answer

Kathy purchased a $2,000 digital TV from Young's Appliances.She will make 12 equal payments over the next year to pay for it.She is using:

Correct AnswerverifiedShow Answer

What would your credit rating be if you are declare bankruptcy?

Correct AnswerverifiedShow Answer

If your put a trip on your credit card that charges you an APR of 19.99% and make the minimum monthly payment of $45 how long will it take to pay off the credit card debt (in months) ?

Correct AnswerverifiedShow Answer

There are _________ main credit bureaus in Canada

Correct AnswerverifiedShow Answer

The debt-to-equity ratio is calculated by dividing your total liabilities by your net worth.

Correct AnswerverifiedShow Answer

The credit cardholders who pay off their balances in full each month are known as convenience users.

Correct AnswerverifiedShow Answer

What would your credit rating be if you have merchandise repossessed?

Correct AnswerverifiedShow Answer

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Correct AnswerverifiedShow Answer

The larger the debt-to-equity ratio, the riskier the situation is for lenders and borrowers.

Correct AnswerverifiedShow Answer

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Correct AnswerverifiedShow Answer

What percentage of consumers are rated super prime based on the VantageScore?

Correct AnswerverifiedShow Answer

The best way to maintain your credit rating is to

Correct AnswerverifiedShow Answer

A home equity loan is based only on the amount you still owe on your mortgage.

Correct AnswerverifiedShow Answer

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