Answers Personal Finance - SC 26-27 For CreditBanking: How to Manage Your Money

Understanding Credit Answers

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Which helps to establish a negative credit history?

Make payments on or before the due date.

Never miss a payment.

Pay off the full amount with the first monthly statement.

Pay less than the minimum amount due.

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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?

to determine if the customer is a likeable person

to determine the customer’s income

to determine the customer’s job title

to determine if the customer is likely to pay back the loan

Xavier buys a computer for $525, which includes taxes. He pays for the computer over a 12-month period by paying $48.13 per month. Which statement about Xavier’s purchase is most likely true?

He used a debit card to make the purchase and paid exactly $525 for the computer.

He used a debit card to make the purchase and paid an additional $52.56 in interest.

He used a credit card to make the purchase and paid exactly $525 for the computer.

He used a credit card to make the purchase and paid an additional $52.56 in interest.

Fido wants to buy a new car. He will need to get a car loan. Fido decides to wait for a few months until his credit history improves. Which explains whether Fido is making a sensible decision?

Fido’s decision is sensible because the selling price of the car should be less in a few months.

Fido’s decision is sensible because the cost of the car loan should be less if his credit history improves.

Fido’s decision is not sensible because he needs the car right away.

Fido’s decision is not sensible because it does not matter if he buys the car now or in a few months.

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 more difficult time borrowing money to buy a house

an easier time getting a car loan

an easier time renting an apartment

a denial when opening a bank account

higher interest rates on credit cards

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

to determine which company has the best credit card features

to determine if he has a history of good credit

to determine if he needs a credit card

to determine his credit limit

Dahlia is explaining to her sister why a positive credit history is important. Which of the following should Dahlia give as reasons for a positive credit history? Check all that apply.

A good credit history portrays irresponsibility.

A good credit history results in lower interest rates.

A good credit history makes borrowing easier.

A good credit history results in higher interest rates.

A good credit history may result in denial of a rental application.

Tamera and Rupert each applied for the same credit card through the same company. Tamera has a positive credit history. Rupert has a negative credit history. Which compares their credit limits and likely interest rates?

Tamera’s credit limit is most likely higher than Rupert’s, and her interest rate is most likely lower.

Tamera’s credit limit is most likely lower than Rupert’s, and her interest rate is most likely higher.

Rupert’s credit limit is most likely higher than Tamera’s, and his interest rate is most likely lower.

Rupert’s credit limit is most likely lower than Tamera’s, and his interest rate is most likely lower.

Which information is found on a credit report?

grade point average

list of schools attended

names of family members

credit account history

Kendrick is planning to buy a house. Which explains why he should establish a positive credit history before buying the house?

He will get the house for a lower price.

It will be easier for him to get a loan to buy the house.

He will be able to get a higher interest rate when buying the house.

He will be able to find a house he likes more quickly.

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

Kenya used money directly from her bank account to buy the jeans.

Kenya borrowed the money to buy the jeans.

Kenya did not have enough money in her bank account to buy the jeans.

Kenya will pay for the jeans over time.

Pete is trying to get a loan. He has a credit score of 480. How is Pete’s lender likely to view this credit score?

Pete is responsible and will pay the loan back on time.

Pete is responsible but will not pay the loan back on time.

Pete is irresponsible but will pay the loan back on time.

Pete is irresponsible and will not pay the loan back on time.

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

previous address, current address, bankruptcy, car loan payment history

current address, monthly income, car loan payment history, date of birth

previous address, current address, schools attended, bankruptcy

current address, monthly income, car loan payment history, schools attended

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?

asking nicely

making sure she has a positive credit history

explaining that she has many outstanding loans

showing her driver’s license

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?

Lois used a debit card to make the purchase.

Lois used a credit card to make the purchase.

Lois either used a debit card or used a credit card and paid the balance in full when the bill arrived.

Lois either used a debit card or used a credit card and made a single payment.