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Exam 5: Introduction to Consumer Credit

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Question 21

Multiple Choice

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Questions you should consider before you decide how and when to make a major purchase include all except

A) do I have the cash I need for a down payment
B) do I want to use my savings for this purchase
C) could I postpone this purchase
D) what are the psychological costs of using credit (being in debt and responsible for monthly payments)
E) all these questions should be considered

F) B) and E)
G) None of the above

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Question 22

Multiple Choice

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If you cosign a loan,

A) you are not being asked to guarantee the debt.
B) it is not your legal responsibility to pay the debt.
C) you'll have to pay up to the full amount of the debt if the borrower does not pay.
D) the creditor must first try to collect from the borrower.
E) the creditor cannot garnish your wages.

F) D) and E)
G) A) and B)

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Question 23

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Consumers have three alternatives in financing current purchases, including drawing up on savings, use their present earnings, or borrow against their expected future income

What percentage of consumers are rated non-prime based on the VantageScore?

What is step two of the steps to resolve a billing dispute?

Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals.

Financing from car dealers in affiliation with car manufacturers is called a conditional sales contract.

If your monthly net (after-tax) income is $1,500, what should be your maximum amount spent on credit payments?

What percentage of consumers are rated prime based on the VantageScore?

"Shopaholics" and young adults are most vulnerable to misusing credit.

A loan officer is examining your income and the amount of your existing debt payments to help in the decision to make a loan to you today.Which aspect of the Five Cs of lending is the loan officer most likely looking at?

What percentage of your VantageScore is based on payment history?

When you cosign a loan, you are being asked to guarantee this debt.

A term that refers to the borrower's assets or net worth is called

A home equity loan is a good source of credit for daily expenses.

Generally, most of the information in your credit file may be reported for only ______ years.

What percentage of Canadian households carry 1 or more credit cards

College students are not a prime target for credit card issuers.

If you are an Ontario resident and you have declared personal bankruptcy for the first time, that fact may be reported by credit bureaus for ____________ years.

What is not consideration of capacity (as part of the 5 Cs of credit) ?