Cwmc Module 8: Debt Competency Test

11 Questions | Total Attempts: 39

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Module Quizzes & Trivia

This quiz is part of LFE Institute's CWMC (Certified Workplace Money Coaching) course. It will test your proficiency in the Debt Module (Module 8) of the program. The questions are all multiple choice, and are designed to be a review of this Module. Let LFE know when you've successfully completed this test and are ready to begin the next Module. Correct answers required for passing grade: 9/11


Questions and Answers
  • 1. 
    Which of the following statements are debt "myths"? (check all that apply)
    • A. 

      If I get too deep in debt, I can eliminate my debts by filing bankruptcy.

    • B. 

      I am so far in debt that my situation is hopeless.

    • C. 

      If I co-sign a loan, the lender will never come after me.

  • 2. 
    As a Money Coach, which of the following options are you likely to suggest for effective debt reduction? (check all that apply)
    • A. 

      Make a solid plan for reducing your debt and consistently stick to it.

    • B. 

      Consolidate debt with an equity loan.

    • C. 

      While the market is down, cash in investments to pay off debts.

    • D. 

      Make payments promptly and in an order predetermined on a spending plan.

    • E. 

      Cut out luxuries and extra items you can live without.

  • 3. 
    Which of the following do consumers need to know to wisely manage their debt? (check all that apply)
    • A. 

      The total amount they owe on every loan

    • B. 

      Interest rates on credit cards, loans, etc.

    • C. 

      Payment due dates

    • D. 

      How the debt is reported to the credit bureaus

  • 4. 
    LFE's preferred typeface for Money Coaching responses is:
    • A. 

      Times New Roman

    • B. 

      Gill Sans

    • C. 

      Trebuchet MS

    • D. 

      Verdana

    • E. 

      Comic Sans MS

  • 5. 
    To consolidate debt, which of the following statements are true? (check all that apply)
    • A. 

      My total debt amount will be reduced by consolidating the money I owe.

    • B. 

      It’s better to have all debts in one consolidation loan, even if the interest rate is higher.

    • C. 

      Debt consolidation loans are not for everyone.

    • D. 

      A bad credit score may cause a lender to turn down an unsecured consolidation loan.

  • 6. 
    When recovering from excess debt, which Web site would you NOT recommend?
    • A. 

      Www.DebtConsolidationCare.com

    • B. 

      GetOutOfDebt.org

    • C. 

      Www.TheKnot.com

    • D. 

      Www.DiscoverDebtFreedom.com

    • E. 

      None of the above. They are all acceptable recommendations.

  • 7. 
    Which one of the following guidelines applies to Money Coaching responses?
    • A. 

      Be blunt and critical when necessary.

    • B. 

      Give advice as needed.

    • C. 

      Be judgmental when appropriate.

    • D. 

      End on a high note.

    • E. 

      None of the above.

  • 8. 
    What simple and practical things can be done to lighten a debt load? (check all that apply)
    • A. 

      Call credit card companies and ask for an interest rate reduction.

    • B. 

      Pay only the minimum amount due.

    • C. 

      Decide which debts to tackle and in what order.

    • D. 

      Make additional purchases on a credit card if items are on sale.

    • E. 

      Borrow money from friends and relatives.

  • 9. 
    Which of the following is generally considered "good debt"?
    • A. 

      Payday loans

    • B. 

      Mortgages

    • C. 

      Credit card use for groceries

    • D. 

      Loans for a vacation

    • E. 

      None of the above

  • 10. 
    Which of the following claims made by a debt reduction/reorganization company might indicate a possible scam? (check all that apply)
    • A. 

      They can approve a loan without checking your credit score.

    • B. 

      They can secure special government funds to pay off debts.

    • C. 

      They are required by law to collect a processing fee before they can begin helping you.

    • D. 

      They will erase the majority of your bad credit history.

    • E. 

      They can assign you a new Social Security number that has good credit.

  • 11. 
    Credit card companies may close your account today if you:
    • A. 

      Pay off your balance every month.

    • B. 

      Only use the recommended 20%-30% of your available credit limit to improve your FICO score.

    • C. 

      Aren’t using your card on a regular basis.

    • D. 

      None of the above.