Understanding Credit Answers

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1
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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?

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
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

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
4

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
5

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?

A
Fido’s decision is sensible because the selling price of the car should be less in a few months.
B
Fido’s decision is sensible because the cost of the car loan should be less if his credit history improves.
C
Fido’s decision is not sensible because he needs the car right away.
D
Fido’s decision is not sensible because it does not matter if he buys the car now or in a few months.
6

Simon used a credit card to buy a skateboard. Which statement is true about his method of payment?

A
Simon paid cash at the store.
B
Simon used money directly from his bank account.
C
Simon will receive the bill later.
D
Simon made the purchase with money he saved.
8

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
9

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
10

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.

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