How Credit Works Answers

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1
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Lenders are prohibited from

A
considering borrowers’ race, sex, and national origin.
B
explaining to borrowers why their application was rejected.
C
using borrowers’ information in a responsible manner.
D
considering borrowers’ sources of income other than salary.
2
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How is a merchant credit card different from a title loan?

A
A merchant credit card is a secured loan, while a title loan is unsecured.
B
A merchant credit card does not have a fixed interest, while a title loan does.
C
A merchant credit card is an unsecured loan, while a title loan is a secured loan.
D
A merchant credit card requires no payment, while a title loan requires a payment.
4

Which types of credit are most similar to each other?

A
auto loan and mortgage loan
B
auto loan and personal loan
C
credit card and mortgage loan
D
mortgage loan and personal loan
7

Interest rates on credit cards

A
can be paid annually.
B
change with the balance.
C
decrease with early payment.
D
can vary widely.
9

How do government regulators protect consumers?

A
by investigating complaints made by lenders
B
by using borrower information responsibly
C
by disclosing accurate credit terms
D
by ensuring lenders comply with the law
10

Credit regulations require lenders to

A
consider only borrowers’ salaries.
B
disclose credit terms to borrowers.
C
use borrowers’ personal information.
D
attract borrowers as they see fit.

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