Study Guide and Quiz Answers

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1
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Which of the following things can help you get a lower interest rate when you receive a loan?

A
A low credit score
B
A history of defaulting
C
Using all of your available credit
D
Collateral
2
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If you co-sign for a friend's credit card, what is the danger to you if your friend fails to pay?

A
You might get secured credit.
B
You might have to pay extra money in taxes.
C
Your credit score might go down.
D
Your credit score might go up.
3

How is a line of credit similar to a credit card?

A
Interest is charged only on the amount you actually borrow.
B
The interest rates are the same.
C
They both require co-signers.
D
Lenders don't check your credit score.
5

What does your credit score tell lenders about you?

A
How likely you are to pay them back
B
How many jobs you have had
C
Where you grew up
D
How much money you paid in taxes
7

What do you need to provide in order to get secured credit?

A
An asset
B
A co-signer
C
A credit card
D
A tax refund
9

Which of the following is a strategy for using credit wisely while improving your credit score?

A
Pay off your credit card in full each month.
B
Use as much of your total available credit as you can.
C
Pay exactly the minimum payment on your credit cards each month.
D
Avoid using your credit card.
11

If you use credit, what are you creating?

A
A line of credit
B
Debt
C
Collateral
D
A default
12

Which of the following is an example of revolving credit?

A
A loan that uses collateral
B
A loan that doesn't use collateral
C
A credit card
D
A single-payment loan
14

If you co-sign for a friend's credit card, what is the danger to you if your friend fails to pay?

A
You might get secured credit.
B
You might have to pay extra money in taxes.
C
Your credit score might go down.
D
Your credit score might go up.
15

How is a line of credit similar to a credit card?

A
Interest is charged only on the amount you actually borrow.
B
The interest rates are the same.
C
They both require co-signers.
D
Lenders don't check your credit score.
16

Why are companies required to perform payroll withholding?

A
To make sure employees are being paid fairly
B
To make sure employees can pay their taxes
C
To help employees save for retirement
D
To help the company pay its share of taxes
17

When you pay more than you owe in taxes and the IRS gives you money back, that money is called _________.

A
A tax refund
B
Gross pay
C
Estimated tax
D
An audit
18

______________ is the amount an employee earns before payroll withholding is performed.

A
Net pay
B
Gross pay
C
Taxable interest
D
An estate

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