HUD HOUSING COUNSELING EXAM
QUESTIONS AND ANSWERS 100%
SOLVED
, Rental Obstacle + Solutions: Low Income - ANSWER-Some Renters reject people
whose Rent would be more than 30% of GMI
-Solutions
-Apply for Housing Assistance
-Expand housing search areas
-Get a roommate
-Move in w/family or friends
Strategies for decreasing expenses and debt - ANSWERPrioritize "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 - ANSWERwww.annualcreditreport.com
Chapter 13 bankruptcy - ANSWERAllows 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 - ANSWER1.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 - ANSWER35% 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 - ANSWERA 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 - ANSWERGet current + pay on
time moving forward
- sett up payments reminders
- adjust budget
Factors in determining credit score - ANSWER-Payments History
- Capacity used
- Length of credit history
- Type of credit used
- New credit
Inquires - ANSWERRequest initiated by a company or person for a consumer's credit
profile information
, How to fix: Incorrect information on a credit report - ANSWERDispute inaccuracies:
*Notify credit reporting agencies of inaccuracies + provide supporting documentation
* keep records of dispute documentation
Steps in creating a budget - ANSWER1. Help client identify short + long-term goals
2. Track income
3. Track expenses
4. Adjust goals + budget *increase income *decrease expenses + debt %.
5. Create client action plan
Section of Credit Report: Public Records - ANSWERItems that are listed in the public
record, including -bankruptcy
- judgments
-tax liens
- wage garnishments
Section of Credit Report: Personal information - ANSWERConsumer identification
information, including:
-Name
- Social Security number
- Addresses
-Phone #
- Employer's
Section of Credit Report: Account / Trade line information - ANSWERInfo about each
consumer credit account, including:
- payment history
- account dates
- credit limit
- balances owed
Payment History - ANSWERTimely / Late
- Payments:Positive: timely
- Negative: late - lien, judgment, collection account, charge-off account
Type of credit used - ANSWERPositive: Different types of credit show variety -
demonstrates that consumers can manage different types of credit
Negative: Fever types show limited profile info - higher risk
Length of credit history - ANSWER-How long a person has bad credit
Positive: Longer credit history provides more info for lenders - lower risk
Negative- shorter history provides little to no info for lenders - higher risk
Capacity Used - ANSWER-How much of credit available has the person used
Positive: low credit utilization = financial management
QUESTIONS AND ANSWERS 100%
SOLVED
, Rental Obstacle + Solutions: Low Income - ANSWER-Some Renters reject people
whose Rent would be more than 30% of GMI
-Solutions
-Apply for Housing Assistance
-Expand housing search areas
-Get a roommate
-Move in w/family or friends
Strategies for decreasing expenses and debt - ANSWERPrioritize "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 - ANSWERwww.annualcreditreport.com
Chapter 13 bankruptcy - ANSWERAllows 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 - ANSWER1.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 - ANSWER35% 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 - ANSWERA 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 - ANSWERGet current + pay on
time moving forward
- sett up payments reminders
- adjust budget
Factors in determining credit score - ANSWER-Payments History
- Capacity used
- Length of credit history
- Type of credit used
- New credit
Inquires - ANSWERRequest initiated by a company or person for a consumer's credit
profile information
, How to fix: Incorrect information on a credit report - ANSWERDispute inaccuracies:
*Notify credit reporting agencies of inaccuracies + provide supporting documentation
* keep records of dispute documentation
Steps in creating a budget - ANSWER1. Help client identify short + long-term goals
2. Track income
3. Track expenses
4. Adjust goals + budget *increase income *decrease expenses + debt %.
5. Create client action plan
Section of Credit Report: Public Records - ANSWERItems that are listed in the public
record, including -bankruptcy
- judgments
-tax liens
- wage garnishments
Section of Credit Report: Personal information - ANSWERConsumer identification
information, including:
-Name
- Social Security number
- Addresses
-Phone #
- Employer's
Section of Credit Report: Account / Trade line information - ANSWERInfo about each
consumer credit account, including:
- payment history
- account dates
- credit limit
- balances owed
Payment History - ANSWERTimely / Late
- Payments:Positive: timely
- Negative: late - lien, judgment, collection account, charge-off account
Type of credit used - ANSWERPositive: Different types of credit show variety -
demonstrates that consumers can manage different types of credit
Negative: Fever types show limited profile info - higher risk
Length of credit history - ANSWER-How long a person has bad credit
Positive: Longer credit history provides more info for lenders - lower risk
Negative- shorter history provides little to no info for lenders - higher risk
Capacity Used - ANSWER-How much of credit available has the person used
Positive: low credit utilization = financial management
