Assessing & Securing Credit Quiz
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Questions and Answers

What is creditworthiness?

  • The term length of a loan
  • The amount of money you can borrow
  • The interest rate on a loan
  • A measure of your ability to repay a loan (correct)

    • What is a credit report?

  • A list of available credit options
  • A record of recent credit inquiries
  • A summary of credit accounts
  • A detailed record of credit history (correct)

    • What is a credit score?

  • The amount of money you owe on your credit cards
  • A summary of your recent credit activity
  • The duration for which you've had credit
  • A three-digit number summarizing credit history (correct)

    • What is revolving credit?

    <p>Credit that can be used repeatedly up to a certain limit</p> Signup and view all the answers

    What is installment credit?

    <p>Credit with a fixed repayment period</p> Signup and view all the answers

    What is open credit?

    <p>Credit with variable interest rates</p> Signup and view all the answers

    Which form of credit has a capped limit and can be used until you hit the predefined barrier?

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

    Which type of credit needs to be paid in full every time, like once a month?

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

    Which credit option has a set repayment schedule for a predetermined period of time?

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

    What is an example of an open credit option?

    <p>Smartphone bill</p> Signup and view all the answers

    What are the advantages of using credit?

    <p>Convenience, Get something you can’t afford now, Meet emergencies</p> Signup and view all the answers

    What are the disadvantages of using credit?

    <p>It can become a habit and encourages overspending, Reduces future buying power, Overuse leads to a poor credit record</p> Signup and view all the answers

    What are referred to as the legal rights of a borrower or debtor?

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

    What is an example of an installment loan?

    <p>$280 monthly automobile loan payment</p> Signup and view all the answers

    Credit is a powerful financial tool that should be used irresponsibly.

    <p>False</p> Signup and view all the answers

    Your creditworthiness is a measure of your ability to repay a loan.

    <p>True</p> Signup and view all the answers

    There are four main kinds of credit: revolving credit, installment credit, open credit, and secured credit.

    <p>False</p> Signup and view all the answers

    Your credit report includes a summary of your credit history.

    <p>False</p> Signup and view all the answers

    Revolving credit allows you to borrow money up to a certain limit and pay it back with interest over time.

    <p>True</p> Signup and view all the answers

    Installment credit needs to be paid in full every time, like once a month.

    <p>False</p> Signup and view all the answers

    Revolving credit has a capped limit and can be used until you hit the predefined barrier.

    <p>True</p> Signup and view all the answers

    Installment credit does not have a set repayment schedule for a predetermined period of time.

    <p>False</p> Signup and view all the answers

    Open credit requires the borrower to pay back the entire amount borrowed at the end of each period.

    <p>True</p> Signup and view all the answers

    An example of open credit is a utility bill.

    <p>True</p> Signup and view all the answers

    Convenience is an advantage of using credit.

    <p>True</p> Signup and view all the answers

    Using credit can reduce future buying power.

    <p>True</p> Signup and view all the answers

    A poor credit record makes it easier and cheaper to get future credit.

    <p>False</p> Signup and view all the answers

    Credit rights are meant to safeguard customers from dishonest and abusive lending practices.

    <p>True</p> Signup and view all the answers

    The Credit Information System Act (CISA) was passed in the Philippines on October 31, 2008.

    <p>True</p> Signup and view all the answers

    The goal of the Credit Information System Act (CISA) is to create a thorough credit history of borrowers.

    <p>True</p> Signup and view all the answers

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