How Credit Works Answers

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1
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Before applying for a credit card, Jacob examines his credit report. Which explains why Jacob might examine his credit report?

t
to determine which company has the best credit card features
t
to determine if he has a history of good credit
t
to determine if he needs a credit card
t
to determine his credit limit
2
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Which helps to establish a negative credit history?

M
Make payments on or before the due date.
N
Never miss a payment.
P
Pay off the full amount with the first monthly statement.
P
Pay less than the minimum amount due.
3

Which information is found on a credit report?

g
grade point average
l
list of schools attended
n
names of family members
c
credit account history
4

Before giving a loan to a customer, a lender examines the customer’s credit report. Which explains why the lender examines the customer’s credit report?

t
to determine if the customer is a likeable person
t
to determine the customer’s income
t
to determine the customer’s job title
t
to determine if the customer is likely to pay back the loan
5

Tyler is using a credit card to purchase a television. Which of the following should Tyler expect? Check all that apply.

A
to have the full amount available in his bank account right away
B
to receive a bill at a later date
C
to be able to pay for it over time
D
to write a check
E
to pay interest if he does not pay in full by a certain date
6

Yoko is buying a car from a local car dealership. She wants to get the lowest interest rate possible. Which will most likely help her get the lowest interest rate?

a
asking nicely
m
making sure she has a positive credit history
e
explaining that she has many outstanding loans
s
showing her driver’s license
7

Quincy wanted his credit report. Which list could Quincy have obtained?

p
previous address, current address, bankruptcy, car loan payment history
c
current address, monthly income, car loan payment history, date of birth
p
previous address, current address, schools attended, bankruptcy
c
current address, monthly income, car loan payment history, schools attended
8

Lois bought clothing at a store. She did not have enough in her bank account to pay for the purchase. After receiving the bill and paying off the balance, she realized that she paid $9.69 in interest. Which statement is true about her method of payment?

L
Lois used a debit card to make the purchase.
L
Lois used a credit card to make the purchase.
L
Lois either used a debit card or used a credit card and paid the balance in full when the bill arrived.
L
Lois either used a debit card or used a credit card and made a single payment.
9

This year, Mr. Thomas has a higher credit score than he did last year. Which of the following should Mr. Thomas expect with the improved score? Check all that apply.

A
a more difficult time borrowing money to buy a house
B
an easier time getting a car loan
C
an easier time renting an apartment
D
a denial when opening a bank account
E
higher interest rates on credit cards
10

Kenya used a debit card to buy a pair of jeans. Which statement is true about her method of payment?

K
Kenya used money directly from her bank account to buy the jeans.
K
Kenya borrowed the money to buy the jeans.
K
Kenya did not have enough money in her bank account to buy the jeans.
K
Kenya will pay for the jeans over time.

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