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Personal Finance Courses: Credit

Test your knowledge

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1.
What collection efforts can a creditor that obtains a court judgment against you legally do?
Choose wisely. There is only one correct answer.
The creditor can take steps to garnish your wages and seize assets, such as bank accounts. The creditor can also file a lien against any real estate you own.
2.
If you have bad credit and receive a credit card offer tailored to those with bad credit, what can you expect the interest rate to be like?
Choose wisely. There is only one correct answer.
Very high. Because you are deemed a risk, your interest rate would be quite high.
3.
When you pay back a loan, what are you typically paying?
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Principal plus interest. Generally, you pay back the principal plus interest over the life of the loan. In certain cases, though, you might pay just the interest for a while.
4.
How long can a bankruptcy stay on your credit report?
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Seven or 10 years, depending on the type of bankruptcy. At present, they can stay this long.
5.
Having no credit profile can result in you being denied credit.
Choose wisely. There is only one correct answer.
True. Creditors like to know that you have a history of using credit.
6.
If the annual percentage rate on your credit card is 18%, you will pay 18% interest on each month's balance.
Choose wisely. There is only one correct answer.
False. The APR refers to the interest rate for the whole year. For this month, it would be only 1/12 of that, which would be 1.5%.
7.
Why might it be a good idea to apply for your first credit card at your bank or credit union?
Choose wisely. There is only one correct answer.
It already has a sense of your financial health. It already has a sense of your financial health. Because of this, it may be willing to offer you a credit card.