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Basics Beginner: Credit

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1.
Credit abuses increase the cost of credit to _______.
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All of the above. Credit abuse increases the cost of credit to everyone.
2.
The Truth in Lending Law requires that a lender disclose _______.
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Both finances charges and APR. The cost of credit must be disclosed in two ways, as finance charges and Annual Percentage Rate (APR).
3.
What is the minimum FICO score that is usually considered a safe risk?
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670. At 670, a person is considered a safe risk and typically receives a loan without a problem and at a low interest rate.
4.
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.
5.
Which law gives a consumer the right to have a credit report item dispute resolved within 30 days?
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Fair Credit Reporting Act. The FCRA gives consumers the right to have disputed information investigated and reported back to them within 30 days.
6.
An example of revolving credit is a(n) _______.
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Credit card agreement. Credit card agreements are an example of revolving credit.
7.
In the language of credit, capital refers to assets that can be used as collateral.
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True. Your creditors will want to know that you have capital; it makes you look less risky.