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Basics Beginner:
Credit
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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Review your answers below to learn more.
1.
Opening several new credit accounts in a short period of time can result in an improved credit score.
Choose wisely. There is only one correct answer.
True
False
False. Opening several new credit accounts in a short period of time can result in a lowered credit score.
2.
Under the Fair Credit Reporting Act, you can be exempted from direct mail solicitations that are based on lists obtained from credit bureaus.
Choose wisely. There is only one correct answer.
True
False
True. You have the right to not be included in them.
3.
Advertisements that state "Bad or no credit is no problem with us" _______.
Choose wisely. There is only one correct answer.
Are helpful to people who have fallen on hard times
Are required disclosure by the Truth in Lending Act
May be a warning of a predatory lending practice
Provide loans at lower interest rates
May be a warning of a predatory lending practice. Be leery of "Bad or no credit is no problem with us" offers.
4.
In the language of credit, capital refers to assets that can be used as collateral.
Choose wisely. There is only one correct answer.
True
False
True. Your creditors will want to know that you have capital; it makes you look less risky.
5.
Paying on credit is cheaper than buying outright because you make smaller monthly payments than one large payment.
Choose wisely. There is only one correct answer.
True
False
False. Paying on credit is more expensive due to the buildup of interest.
6.
Having no credit profile can result in you being denied credit.
Choose wisely. There is only one correct answer.
True
False
True. Creditors like to know that you have a history of using credit.
7.
A creditor is a person who borrows money.
Choose wisely. There is only one correct answer.
True
False
False. A creditor is a person who lends money; a debtor borrows money.
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