Credit Literacy Group Quiz #1

15 Questions

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Credit Quizzes & Trivia

This introductory quiz is made to help consumers become aware of the vast number of myths and misconceptions and includes some of the basic elements of about credit and financial literacy. �


Questions and Answers
  • 1. 
    • A. 

      True

    • B. 

      False

  • 2. 
    • A. 

      Insurance Premiums

    • B. 

      Employment opportunities

    • C. 

      Interest Rates / Loan Terms (and therefore payments)

    • D. 

      All of the above

  • 3. 
          You discover a creditor has incorrectly reported derogatory information on your account and you decide to dispute this inaccuracy with the credit bureaus.  The credit bureaus then notify you that they are deleting the disputed reference and concluding their investigation.   Is the creditor allowed to report this information again to be placed on your credit report?
    • A. 

      Yes, the creditor can report the information again to the credit bureaus.

    • B. 

      No, once deleted the item the item must remain off of your report.

    • C. 

      Yes, but only with your authorization.

    • D. 

      Sure but they will be subject to fines and penalties.

  • 4. 
          You employ a ‘Credit Repair Company’ and pay them $350 to finally get the item removed from your credit report.  The Credit Repair Company provides you a money back guarantee that they will be successful in getting the item deleted from your file.  In June you received confirmation from the bureaus that the item has been deleted but in August you discover that the item has reappeared on your file.  You contact the Credit Repair Company for a refund of your $350, if they honor their agreement will they return your money?
    • A. 

      Yes

    • B. 

      No

  • 5. 
          Each consumer has a credit score in their credit file and the score adjusts up or down each month, based on positive or negative information reported by creditors.
    • A. 

      True

    • B. 

      False

  • 6. 
          Consumers with credit scores lower than  _____  should be prepared to pay extra in interest expense because the credit industry considers these customers to be a higher risk.
    • A. 

      760

    • B. 

      720

    • C. 

      680

    • D. 

      660

  • 7. 
          Chris and Sandy are each obtaining a $300,000 mortgage loan.  Chris has 720 median credit score and Sandy has 760 credit score.  Chris will have a mortgage payment how much higher than Sandy because of the lower credit score?
    • A. 

      Approximately $15 per month

    • B. 

      Approximately $35 per month

    • C. 

      Approximately $110 per month

    • D. 

      None; both are excellent scores and will result in no discernible difference

  • 8. 
          Credit bureaus are legally required to investigate any item disputed by a consumer.  Essentially, the investigation process that credit bureaus are required to follow is that after receiving dispute from consumer, the credit bureau must:
    • A. 

      Ask the creditor whether the information they reported to the bureau(s) was accurate; if the creditor says the information is correct, the investigation is complete.

    • B. 

      Consider your claim and determine the likelihood of your accuracy based on documentation you provide.

    • C. 

      Ask you and the creditor for documentation proving accuracy; they then evaluate all documentation to determine the truth and report on your file based on their decision.

    • D. 

      Request evidence from you supporting your claim and base decision on your submitted documentation.

  • 9. 
          You have a balance of $10 on your credit card at the end of last month.  Today you purchase a microwave for $200 using your credit card.  As long as you pay $210 toward your balance by the end of the grace period you will avoid paying any interest on the microwave purchase.
    • A. 

      True

    • B. 

      False

  • 10. 
           Paying ‘points’ when obtaining a mortgage means that you:
    • A. 

      Have paid money for having a riskier loan.

    • B. 

      Have an expensive mortgage company.

    • C. 

      Are paying money to get a lower interest rate.

    • D. 

      Will have to pay a pre-payment penalty if you pay off your mortgage.

  • 11. 
          You decide to buy a certain car and the car is guaranteed to last 20 years without repair or maintenance BUT at the end of 20 years they take the car back from you.  You decide to pay CASH for the car and the dealer offers two payment plans for you to choose from; financially speaking, which of the following should you choose:
    • A. 

      Pay $10,000 for the car now and get zero back at the end of the 20 years.

    • B. 

      Pay $20,000 for the car now and get all $20,000 returned at the end of the 20 years.

  • 12. 
          An ‘Introductory’ interest rate on a new credit card must stay in place and not change for how long?
    • A. 

      3 months

    • B. 

      6 months

    • C. 

      9 months

    • D. 

      12 months

  • 13. 
    • A. 

      $27,500

    • B. 

      $7,500

    • C. 

      $150

    • D. 

      None of the above, there is insufficient information provided to make determination

  • 14. 
          You discover that a ‘hacker’ has stolen you identity and you have become a victim of Identity Theft, the same circumstance as last example – but in this example you have an Identity Theft protection service.  True or False:  Because you have Identity Theft Protection Coverage, your coverage will pay for any amounts for which you are deemed responsible?
    • A. 

      True

    • B. 

      False

  • 15. 
          There is NO method of Identity Theft protection that is 100% effective in prevention of your identity being stolen for the purposes of opening credit in your name.
    • A. 

      True

    • B. 

      False

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