FINANCIAL LITERACY CREDIT TEST
AND ANSWERS.
What is the term used for a debt assistance plan that allows you to pay off loans more
quickly? - Answers-debt consolidation
What should consumers not do when they are offered credit that they did not solicit? -
Answers-Look to see how to sign up and do so before the offer expires.
Paul wants to purchase a lawn mower from a friend but doesn't have the money. The
friend generously says he will let Paul have the lawn mower on credit but wants Paul to
agree to give him his power saw if he can't pay back the loan. What is the correct term
for this scenario? - Answers-secured loan
Which number would be a valid credit score? - Answers-800
What is the correct definition of "variable rate"? - Answers-an interest rate that is going
to change with the health of the economy
Which scenario gives the best example of simple interest? - Answers-Aunt Lucy lends
you $1000 which she generously lets you pay back when you graduate from college in
four years. She charges you 5% simple interest. The total amount you will pay is $1050.
What percentage of college students declared bankruptcy, according to the article by
financial consultant Dave Ramsey? - Answers-19%
What is a good way to repair damaged credit? - Answers-Use cash for all your
purchases, Pay off your credit cards and loans as soon as possible, Refrain from using
your credit cards (all of the above)
Which of these is the best example of "good debt"? - Answers-a mortgage for buying a
home
Which of these is not a factor in determining your credit score? - Answers-where you
live
Which option relates to not having a good credit history? - Answers-borrowing money
and then not being able to pay back the lender
What is the best way to describe a consumer's "cost of credit"? - Answers-what
consumers will pay for using credit from a lender, often referred to as interest payments
AND ANSWERS.
What is the term used for a debt assistance plan that allows you to pay off loans more
quickly? - Answers-debt consolidation
What should consumers not do when they are offered credit that they did not solicit? -
Answers-Look to see how to sign up and do so before the offer expires.
Paul wants to purchase a lawn mower from a friend but doesn't have the money. The
friend generously says he will let Paul have the lawn mower on credit but wants Paul to
agree to give him his power saw if he can't pay back the loan. What is the correct term
for this scenario? - Answers-secured loan
Which number would be a valid credit score? - Answers-800
What is the correct definition of "variable rate"? - Answers-an interest rate that is going
to change with the health of the economy
Which scenario gives the best example of simple interest? - Answers-Aunt Lucy lends
you $1000 which she generously lets you pay back when you graduate from college in
four years. She charges you 5% simple interest. The total amount you will pay is $1050.
What percentage of college students declared bankruptcy, according to the article by
financial consultant Dave Ramsey? - Answers-19%
What is a good way to repair damaged credit? - Answers-Use cash for all your
purchases, Pay off your credit cards and loans as soon as possible, Refrain from using
your credit cards (all of the above)
Which of these is the best example of "good debt"? - Answers-a mortgage for buying a
home
Which of these is not a factor in determining your credit score? - Answers-where you
live
Which option relates to not having a good credit history? - Answers-borrowing money
and then not being able to pay back the lender
What is the best way to describe a consumer's "cost of credit"? - Answers-what
consumers will pay for using credit from a lender, often referred to as interest payments
