HUD CERTIFICATION EXAM 5 PRACTICE
QUESTIONS WITH DETAILED EXPLANATIONS
2026
◉ Strategies for decreasing expenses and debt.
Answer: Prioritize "needs over "wants"
-reduce or eliminate "wants"
-cancel or downgrade services(e.g. cable, telephone)
-limit miscellaneous spending
- stick to a shopping list
- pay off a loan or credit card
- move to more affordable housing
- change insurance coverage to lower premiums
◉ Fair Credit Reporting Act (FCRA).
Answer: -Right to know what is your file
-Right to dispute incomplete or inaccurate information
- Access to your file is limited only to people w/valid need (i.e,
creditor, insurer)
-You may seek damages from violators (sue)
- States have their own rules which additionally project
,◉ What documents to use when tracking income.
Answer: -Paychecks, direct deposits slips
- If self-employed, income + expenses sheet
- Additional income checks or cash
- Government benefit letters
◉ Site to obtain free credit report.
Answer: www.annualcreditreport.com
◉ Chapter 13 bankruptcy.
Answer: Allows individuals w/regular income to develop a plan to
repay all or part of their debts over 3 to 5 years can stop foreclose
sure proceedings + may delinquent mortgage payments over time
◉ Steps to take if victim of identity theft.
Answer: -Place a fraud alert w/the credit reporting agencies
- order credit reports to review + identify inaccuracies
- create an identify theft report obtain ID theft affidavit from the FTC
- File a police report
◉ Fair and Accurate credit Transcription Act (FACTA).
,Answer: -Right to free annual credit report
- Right to place a fraud alert on your credit file
- Receipts may not include entirety of credit card #s
◉ Four Steps of Asset building.
Answer: 1.Chose the right bank or credit union account
2. Build savings for emergencies + Large purchase 3. Invest for
retirement
4. Take advantage of tax credits
◉ Fair credit billing Act (FCBA).
Answer: -You can dispute billing errors associated w/credit card
account
- Must be billed in a timely manner
◉ % of factors how they affect credit score.
Answer: 35% account history
30% amounts owed
15% length of credit history
10% new credit
10% types of credit used
, ◉ Credit reporting agencies on FICO Score.
Answer: -EQUIFAX
- EXPERIAN
- TRANS UNION
◉ FICO Score.
Answer: -Credit scores often referred to as
= Fair Isaac Corporation
Range:300-850
◉ Means test.
Answer: A bankruptcy qualification that considers income + equity
in assets to determine if a client has the ability to repay part of the
debt
◉ How to fix: Credit Card maxed / too much debt.
Answer: -Pay down debt + keep balances low
- Pay more than minimum
- know the balance - check statements
◉ How to fix: Delinquencies / collections / Judgments.
Answer: Get current + pay on time moving forward
QUESTIONS WITH DETAILED EXPLANATIONS
2026
◉ Strategies for decreasing expenses and debt.
Answer: Prioritize "needs over "wants"
-reduce or eliminate "wants"
-cancel or downgrade services(e.g. cable, telephone)
-limit miscellaneous spending
- stick to a shopping list
- pay off a loan or credit card
- move to more affordable housing
- change insurance coverage to lower premiums
◉ Fair Credit Reporting Act (FCRA).
Answer: -Right to know what is your file
-Right to dispute incomplete or inaccurate information
- Access to your file is limited only to people w/valid need (i.e,
creditor, insurer)
-You may seek damages from violators (sue)
- States have their own rules which additionally project
,◉ What documents to use when tracking income.
Answer: -Paychecks, direct deposits slips
- If self-employed, income + expenses sheet
- Additional income checks or cash
- Government benefit letters
◉ Site to obtain free credit report.
Answer: www.annualcreditreport.com
◉ Chapter 13 bankruptcy.
Answer: Allows individuals w/regular income to develop a plan to
repay all or part of their debts over 3 to 5 years can stop foreclose
sure proceedings + may delinquent mortgage payments over time
◉ Steps to take if victim of identity theft.
Answer: -Place a fraud alert w/the credit reporting agencies
- order credit reports to review + identify inaccuracies
- create an identify theft report obtain ID theft affidavit from the FTC
- File a police report
◉ Fair and Accurate credit Transcription Act (FACTA).
,Answer: -Right to free annual credit report
- Right to place a fraud alert on your credit file
- Receipts may not include entirety of credit card #s
◉ Four Steps of Asset building.
Answer: 1.Chose the right bank or credit union account
2. Build savings for emergencies + Large purchase 3. Invest for
retirement
4. Take advantage of tax credits
◉ Fair credit billing Act (FCBA).
Answer: -You can dispute billing errors associated w/credit card
account
- Must be billed in a timely manner
◉ % of factors how they affect credit score.
Answer: 35% account history
30% amounts owed
15% length of credit history
10% new credit
10% types of credit used
, ◉ Credit reporting agencies on FICO Score.
Answer: -EQUIFAX
- EXPERIAN
- TRANS UNION
◉ FICO Score.
Answer: -Credit scores often referred to as
= Fair Isaac Corporation
Range:300-850
◉ Means test.
Answer: A bankruptcy qualification that considers income + equity
in assets to determine if a client has the ability to repay part of the
debt
◉ How to fix: Credit Card maxed / too much debt.
Answer: -Pay down debt + keep balances low
- Pay more than minimum
- know the balance - check statements
◉ How to fix: Delinquencies / collections / Judgments.
Answer: Get current + pay on time moving forward
