UGBA 135 FINAL EXAM UPDATED QUESTIONS
AND VERIFIED SOLUTIONS
◉ Info on accessing credit cards Answer: legally entitles to one free
copy of your report each year from each of the three major bureaus
◉ what is the federally mandated website for free credit reports?
Answer: www.annualcreditreport.com
◉ What is the FICO formula? Answer: 35% record of paying bills on
time - for a significant period of time
30% debt to credit ration - which is the total balance on your credit
15% length of credit history
10% new accounts and recent applications for credit cards and
loans
◉ What is the best FICO score can be? Answer: 780 - 850
◉ What is the lowest FICO score? Answer: 620 - 660
◉ What % of credit reports have serious errors Answer: - 25%
,◉ What are methods of identity theft? Answer: theft from purse or
wallet, phishing (via email or phone) adn hacking
◉ What to do if your methods of identity theft Answer: immediately
contact the three major credit bureaus and put a fraud alert contact
◉ Does the IRS contact you? Answer: no
◉ What are some FICO score improvement methods? Answer: pay
bills on time - for a significant period of time
keep your debts to credit ratio near 30%
Avoid DUIs
◉ What is your debt to credit ratio? Answer: total balance on your
credit cards and other loans compared to your total credit limit
having one near 30% is good
◉ Are social security benefits taxable? Answer: Yes, 85% of them are
◉ How much do seniors take from what they put into their social
security? Answer: about 6 times what they put in
,◉ what percentage of all the money the federal government
currently budgets for senior citizens Answer: 42%
◉ what are the eligibility requirements for social security benefits
Answer: 40 quarters (10 years) earning at least $1,320 per quarter
at 66 years can receive full benefits regardless of income
◉ What are the contributions to social security? Answer: employer
and employee share equally in the program - the employers
contributions are tax deductible - the employers are not
◉ what is the contribution rate to social security Answer: 12.4% - of
all earned income, 6.2% by employee and 6.2% by employer -
◉ Is there social security taxes on earned income? Answer: no, not
on interest, dividends or capital gains
◉ what was social security designed to fo? Answer: supplement a
persons own pension plan and lifetime savings
◉ Facts to know about Social Security Answer: no means test for SS
you do not need to be poor to receive a benefit
Pay as you go plan - so as costs rise taxes must also rise
, ◉ What is Part A of Medicare? Answer: currently free to seniors who
apply financed by a 2.9% payroll tax on all earned income paid by all
workers with NO salary cap
1.45% payed by employee - 1.45% paid by employer
This part has deductibles
◉ What is part B of medicare? Answer: this part is optional and
means tested
has deductibles
receive monthly premiums
◉ What is part D of medicare? Answer: it is optional and means
tested
prescription drugs plan currently provided by private insurance
companies and financed 25% by monthly premiums - inspired 75%
by taxes
◉ What is a W-4 form? Answer: The first thing an employer will
have you do when you start a job
lets the employer knowhow much it is required by law to deduct or
withhold form each paycheck for your personal income taxes, both
federal and states
AND VERIFIED SOLUTIONS
◉ Info on accessing credit cards Answer: legally entitles to one free
copy of your report each year from each of the three major bureaus
◉ what is the federally mandated website for free credit reports?
Answer: www.annualcreditreport.com
◉ What is the FICO formula? Answer: 35% record of paying bills on
time - for a significant period of time
30% debt to credit ration - which is the total balance on your credit
15% length of credit history
10% new accounts and recent applications for credit cards and
loans
◉ What is the best FICO score can be? Answer: 780 - 850
◉ What is the lowest FICO score? Answer: 620 - 660
◉ What % of credit reports have serious errors Answer: - 25%
,◉ What are methods of identity theft? Answer: theft from purse or
wallet, phishing (via email or phone) adn hacking
◉ What to do if your methods of identity theft Answer: immediately
contact the three major credit bureaus and put a fraud alert contact
◉ Does the IRS contact you? Answer: no
◉ What are some FICO score improvement methods? Answer: pay
bills on time - for a significant period of time
keep your debts to credit ratio near 30%
Avoid DUIs
◉ What is your debt to credit ratio? Answer: total balance on your
credit cards and other loans compared to your total credit limit
having one near 30% is good
◉ Are social security benefits taxable? Answer: Yes, 85% of them are
◉ How much do seniors take from what they put into their social
security? Answer: about 6 times what they put in
,◉ what percentage of all the money the federal government
currently budgets for senior citizens Answer: 42%
◉ what are the eligibility requirements for social security benefits
Answer: 40 quarters (10 years) earning at least $1,320 per quarter
at 66 years can receive full benefits regardless of income
◉ What are the contributions to social security? Answer: employer
and employee share equally in the program - the employers
contributions are tax deductible - the employers are not
◉ what is the contribution rate to social security Answer: 12.4% - of
all earned income, 6.2% by employee and 6.2% by employer -
◉ Is there social security taxes on earned income? Answer: no, not
on interest, dividends or capital gains
◉ what was social security designed to fo? Answer: supplement a
persons own pension plan and lifetime savings
◉ Facts to know about Social Security Answer: no means test for SS
you do not need to be poor to receive a benefit
Pay as you go plan - so as costs rise taxes must also rise
, ◉ What is Part A of Medicare? Answer: currently free to seniors who
apply financed by a 2.9% payroll tax on all earned income paid by all
workers with NO salary cap
1.45% payed by employee - 1.45% paid by employer
This part has deductibles
◉ What is part B of medicare? Answer: this part is optional and
means tested
has deductibles
receive monthly premiums
◉ What is part D of medicare? Answer: it is optional and means
tested
prescription drugs plan currently provided by private insurance
companies and financed 25% by monthly premiums - inspired 75%
by taxes
◉ What is a W-4 form? Answer: The first thing an employer will
have you do when you start a job
lets the employer knowhow much it is required by law to deduct or
withhold form each paycheck for your personal income taxes, both
federal and states
