Assessing & Securing Credit Quiz
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Questions and Answers

What is the main factor that makes up 35% of the credit score?

  • Credit payment history (correct)
  • New credit
  • Credit utilization
  • Credit mix

    • What is the purpose of the Equal Credit Opportunity Act (ECOA)?

  • To offer credit insurance to individuals relying on credit
  • To maintain a complete history of credit transactions
  • To ensure fair access to credit and prohibit discriminatory practices (correct)
  • To calculate credit scores for individuals applying for credit

    • What is the purpose of credit insurance?

  • To prevent unauthorized inquiries by credit card companies
  • To calculate credit scores for individuals applying for credit
  • To offer financial security in case of identity theft
  • To ensure that all credit payments will continue to be made in unforeseen circumstances (correct)

    • What is the range of Vantage Score, created as an alternative to the FICO scoring system?

    <p>501 to 990</p> Signup and view all the answers

    What should an individual do if they find inaccurate information in their credit report?

    <p>Send a letter to the credit bureau that issued the credit report</p> Signup and view all the answers

    What type of credit is provided for a short period, such as retail store credit?

    <p>Non-installment credit</p> Signup and view all the answers

    Which type of credit is provided for specific purchases, with interest charged on the amount borrowed?

    <p>Installment credit</p> Signup and view all the answers

    What is the primary advantage of using credit for making large purchases?

    <p>Ability to make large purchases</p> Signup and view all the answers

    What is one of the disadvantages of using credit according to the text?

    <p>Excessive spending</p> Signup and view all the answers

    Which type of credit allows individuals to make purchases instantly without carrying cash or writing checks?

    <p>Revolving open-end credit</p> Signup and view all the answers

    What type of credit is provided up to a specified maximum amount based on income and credit history?

    <p>Revolving open-end credit</p> Signup and view all the answers

    What is one of the primary advantages of using credit?

    <p>Building a good credit history</p> Signup and view all the answers

    What does non-installment credit refer to?

    <p>Credit provided for a short period, such as retail store credit</p> Signup and view all the answers

    What is the main disadvantage of using credit according to the text?

    <p>Excessive spending</p> Signup and view all the answers

    Which type of credit is provided for specific purchases, with interest charged on the amount borrowed?

    <p>Installment credit</p> Signup and view all the answers

    What is the primary purpose of credit insurance?

    <p>To provide financial security in case of unforeseen circumstances</p> Signup and view all the answers

    What does the Equal Credit Opportunity Act (ECOA) primarily aim to ensure?

    <p>Access to fair credit and prohibition of discriminatory practices</p> Signup and view all the answers

    What factor makes up the largest portion (35%) of the credit score?

    <p>Credit history</p> Signup and view all the answers

    What is the main function of credit bureaus mentioned in the text?

    <p>To provide detailed records of credit transactions and calculate credit scores</p> Signup and view all the answers

    What does Vantage Score measure?

    <p>The likelihood of repaying debt in a timely manner</p> Signup and view all the answers

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