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Basics Beginner: Credit

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1.
Under the Fair Credit Reporting Act, anyone inquiring about your credit report must first get _______ permission.
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Written. Written permission is required.
2.
An example of revolving credit is a(n) _______.
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Credit card agreement. Credit card agreements are an example of revolving credit.
3.
Your credit score is determined by using _______.
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A mathematical model. This mathematical model calculates your credit risk based on several factors.
4.
When creditors check a borrower's capacity, capital, and character to determine creditworthiness, they are using _______.
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The three Cs. A creditor usually looks at three factors, known as the "the three Cs": capacity, capital, and character.
5.
Which of the following is the largest determiner of your FICO score?
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Payment history. Your payment history carries more weight than any other measure.
6.
Advertisements that state "Bad or no credit is no problem with us" _______.
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May be a warning of a predatory lending practice. Be leery of "Bad or no credit is no problem with us" offers.
7.
Paying on credit is cheaper than buying outright because you make smaller monthly payments than one large payment.
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False. Paying on credit is more expensive due to the buildup of interest.