WISE Test Questions-Credit questions and Answers Already Graded A 2023

Which of the following is considered to be open-end credit? Ans Department store charge cards. When a person brings an item to a pawnshop to obtain cash, the transaction is considered Ans a collateralized loan. What is meant by an uncollateralized loan? Ans A personal loan without assets to cover the loan amount. When a person declares bankruptcy that fact will appear on the person?s credit report Ans for a 10 year period. A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take? Ans Notify the credit card companies in order to negotiate a new payment plan. To qualify for a Federal Housing Administration (FHA) loan, a person must generally Ans fulfill income guidelines One of Andre's seldom-used credit cards has been stolen without his knowledge. When he gets his monthly statement, he realizes that someone else has been using the card and reports it stolen. The maximum amount of the unauthorized purchases he is he liable for is: Ans $50 How can you avoid becoming a victim of identity theft? Ans Avoid giving your Social Security number on a phone call you did not initiate You were approved for a loan that combines all your debts into one loan with lower payments based on a longer repayment period or lower APR. This type of loan is a: Ans Consolidation loan Jim is a college senior with $50,000 in student loans. He earned $2,000 last year. He has no savings so he charged a $5,000 vacation on his credit card. How would you characterize Jim's use of credit? Ans It is irresponsible use of credit because his current income is too low Ms. Jackson contacted a mortgage company about refinancing her mortgage. The mortgage company gave her a home loan with unusually high costs and without regard to her ability to repay. This practice is called: Ans Predatory lending What is a credit score? Ans A number used to determine how much credit to extend to a person.