This quiz works best with JavaScript enabled. Home > Economics > Finance > Credit > Credit – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Credit Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The only thing measured in a FICO score is: A) Weight. B) Responsibility. C) Height. D) Debt. Show Answer Correct Answer: D) Debt. 2. When a bank takes possession of a home because the borrower has failed to make loan payments, it is called A) Underwater. B) Foreclosure. C) Mortgage. D) Assessment. Show Answer Correct Answer: B) Foreclosure. 3. After a year or two if the SHG is regular in savings, it becomes eligible for availing loan from A) Bank. B) Money lenders. C) Cooperative societies. D) Traders. Show Answer Correct Answer: A) Bank. 4. Which of the following is not a factor in determining a FICO score? A) Using credit cards. B) Taking out a mortgage on a house. C) Getting a personal loan from a bank. D) Paying cash for all purchases. Show Answer Correct Answer: D) Paying cash for all purchases. 5. Which of these is LEAST LIKELY to determine credit worthiness? A) Personal health history. B) Length of employment. C) Personal educational background. D) Payment history. Show Answer Correct Answer: A) Personal health history. 6. What is a deadbeat in the credit card world? A) Someone who has stopped paying their monthly payments. B) Someone who pays more than the minimum payment each month. C) Someone who pays their bill in full each month. D) Someone who misses a few monthly payments. Show Answer Correct Answer: C) Someone who pays their bill in full each month. 7. How many free credit reports are you legally entitled to each year? A) Three credit reports from each credit bureau. B) One credit report each year. C) One credit report from each credit bureau. D) Three credit reports each year. Show Answer Correct Answer: C) One credit report from each credit bureau. 8. What does a debit card do? A) Total money earned. B) Total money earned before taxes are paid. C) Money is owed. D) Withdraws money from the bank account immediately. Show Answer Correct Answer: D) Withdraws money from the bank account immediately. 9. You should use credit to buy ..... A) Car. B) New video system. C) New phone. D) None of above. Show Answer Correct Answer: A) Car. 10. Certain charges that can be incurred when using a credit card. A) Finance charges. B) Penalty charges. C) Prime charges. D) None of above. Show Answer Correct Answer: A) Finance charges. 11. A number assigned to a person as a general indication of their creditworthiness A) Credit report. B) Loan. C) Credit score. D) Loan score. Show Answer Correct Answer: C) Credit score. 12. On average, how much of a person's take-home pay is sent back out for debt payments? A) 40%. B) 25%. C) 12%. D) 8%. Show Answer Correct Answer: B) 25%. 13. The cost for Dan's college next year is $ 20, 000. He took out a loan for $ 6, 000 and received a scholarship for $ 2, 500. How much will still be left to pay? A) $ 16, 500. B) $ 12, 500. C) $ 11, 500. D) $ 11, 000. Show Answer Correct Answer: C) $ 11, 500. 14. A record of your past borrowing and repayments A) Credit score. B) Credit Bureau. C) Credit history. D) Credit report. Show Answer Correct Answer: C) Credit history. 15. The fee incurred when you exceed our credit limit on your credit card is the ..... A) Cash-advance fee. B) Over the limit fee. C) Service fee. D) Annual fee. Show Answer Correct Answer: B) Over the limit fee. 16. What does FICO score not measure? A) Savings Account Balance. B) Types of Debt. C) New Debt. D) Debt History. Show Answer Correct Answer: A) Savings Account Balance. 17. A stipulation in the loan (credit) agreement that requires the entire remaining balance due if you miss a single payment is a(n) ..... clause. A) Subprime. B) Secured. C) Acceleration. D) Balloon payment. Show Answer Correct Answer: C) Acceleration. 18. The cost of credit expressed as a yearly interest rate is known as: A) Annual Percentage Rate (APR). B) Penalty APR. C) Annual Fee. D) Introductory Rate. Show Answer Correct Answer: A) Annual Percentage Rate (APR). 19. When a person brings an item to a pawnshop to obtain cash, the transaction is considered a(n): A) Unsecured loan. B) Collateralized loan. C) Custodial payment. D) Sales agreement. Show Answer Correct Answer: B) Collateralized loan. 20. Which of the following is NOT a positive spending habit? A) Find alternative activities to shopping. B) Use credit for your wants and not needs. C) Consider stores that sell "seconds, " rebuilt, or used products. D) Wait and shop when there are sales. Show Answer Correct Answer: B) Use credit for your wants and not needs. 21. All are good signs of credit; except A) Staying within your credit limit. B) Never missing a payment. C) Paying late on occasion. D) Paying at least the minimum required payment. Show Answer Correct Answer: C) Paying late on occasion. 22. The most commonly used credit score in the United States. Fair Isaac Corporation A) FICO. B) FICA. C) BICS. D) None of above. Show Answer Correct Answer: A) FICO. 23. The principle of a loan is: A) The "original" amount of a loan less fees and interest. B) The "original" borrowed amount plus interest. C) The "original" borrowed with amount with fees included. D) The "original" amount of money borrowed. Show Answer Correct Answer: D) The "original" amount of money borrowed. 24. A number assigned to a person that indicates to lenders their capacity to repay a loan. A) Credit score. B) Credit bureau. C) Credit history. D) Credit report. Show Answer Correct Answer: A) Credit score. 25. If Sammy's expenses are greater than his income, what must he do to balance his budget? A) Earn more money. B) Spend less money on expenses. C) Earn more money AND spend less. D) None of the above. Show Answer Correct Answer: C) Earn more money AND spend less. 26. What percent of your credit score is based upon payment history or an individual? A) 35. B) 10. C) 15. D) 30. Show Answer Correct Answer: A) 35. 27. When do you need to show your credit score? A) When you apply for a loan. B) When you apply for a credit card. C) When you apply for a house. D) All of these. Show Answer Correct Answer: D) All of these. 28. When do you need credit? A) When you apply for a loan. B) When you apply for a credit card. C) When you apply for a house. D) All of the above. Show Answer Correct Answer: D) All of the above. 29. An example of a good credit score is ..... A) 100. B) 300. C) 800. D) None of above. Show Answer Correct Answer: C) 800. 30. Advantages of keeping a spending plan. A) Reach financial goals. B) Identify income and expenses. C) There are none. D) (A & B). Show Answer Correct Answer: D) (A & B). 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