30 Questions
What is creditworthiness?
A measure of your ability to repay a loan
What is a credit report?
A detailed record of credit history
What is a credit score?
A three-digit number summarizing credit history
What is revolving credit?
Credit that can be used repeatedly up to a certain limit
What is installment credit?
Credit with a fixed repayment period
What is open credit?
Credit with variable interest rates
Which form of credit has a capped limit and can be used until you hit the predefined barrier?
Revolving credit
Which type of credit needs to be paid in full every time, like once a month?
Open credit
Which credit option has a set repayment schedule for a predetermined period of time?
Installment credit
What is an example of an open credit option?
Smartphone bill
What are the advantages of using credit?
Convenience, Get something you can’t afford now, Meet emergencies
What are the disadvantages of using credit?
It can become a habit and encourages overspending, Reduces future buying power, Overuse leads to a poor credit record
What are referred to as the legal rights of a borrower or debtor?
Credit rights
What is an example of an installment loan?
$280 monthly automobile loan payment
Credit is a powerful financial tool that should be used irresponsibly.
False
Your creditworthiness is a measure of your ability to repay a loan.
True
There are four main kinds of credit: revolving credit, installment credit, open credit, and secured credit.
False
Your credit report includes a summary of your credit history.
False
Revolving credit allows you to borrow money up to a certain limit and pay it back with interest over time.
True
Installment credit needs to be paid in full every time, like once a month.
False
Revolving credit has a capped limit and can be used until you hit the predefined barrier.
True
Installment credit does not have a set repayment schedule for a predetermined period of time.
False
Open credit requires the borrower to pay back the entire amount borrowed at the end of each period.
True
An example of open credit is a utility bill.
True
Convenience is an advantage of using credit.
True
Using credit can reduce future buying power.
True
A poor credit record makes it easier and cheaper to get future credit.
False
Credit rights are meant to safeguard customers from dishonest and abusive lending practices.
True
The Credit Information System Act (CISA) was passed in the Philippines on October 31, 2008.
True
The goal of the Credit Information System Act (CISA) is to create a thorough credit history of borrowers.
True
Test your knowledge of assessing and securing credit with this quiz. Learn about types of credit, advantages and disadvantages of using credit, credit rights, history and insurance, credit reports, credit score, identity theft, credit cards, and consumer loans.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
