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Exam 6: Introduction to Consumer Credit

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Question 71

True/False

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If someone has stolen your identity, the Federal Trade Commission recommends that you contact the fraud departments of each of the three major credit bureaus.

A) True
B) False

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Question 72

Multiple Choice

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Paul Carter is applying for a loan from a bank. The bank is concerned because Paul is an airline pilot for United Airlines. The bank thinks that Paul may be laid off in the near future. Which one of the 5 Cs of credit is the bank concerned with?

A) Character
B) Capacity
C) Capital
D) Collateral
E) Conditions

F) A) and C)
G) C) and D)

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Question 73

True/False

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A creditor may ignore your retirement income in rating your application.

With a revolving line of credit, borrowings are permitted up to a specified limit and for a stated period.

Which federal law protects you by requiring credit bureaus to furnish correct and complete information to creditors?

In the 5 Cs of credit, character refers to the borrower's attitude toward credit obligations.

You may not be denied credit because you receive Social Security or public assistance.

Which one of the following is a disadvantage of using credit?

Today, Michael purchased a laptop computer from a retail outlet. He has agreed to pay for this purchase in full 30 days from today. This is an example of:

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Which one of the following would not typically be closed-end credit?

Which one of the following is not included in the 5 C's of credit?

Department stores and gasoline companies are good places to obtain your first credit card.

Which federal law prohibits credit card issuers from sending unrequested cards?

Which federal consumer credit law prohibits credit discrimination based on sex and marital status?

Brian Porter's net worth is $110,000, excluding his home. His liabilities of $50,000 include all of his credit card balances and the balance due on his auto loan and home improvement loan. His townhouse has a market value of $220,000 and he owes $190,000 to his mortgage company. What is Brian's debt-to-equity ratio?

Installment cash credit is a direct loan of money for personal purposes, home improvements, or vacation expenses.

Closed-end in credit is used for a specific purpose and involves a specified amount.

Although credit allows more immediate satisfaction of needs and desires, it does not increase total purchasing power.

Lester McCann is thinking about getting a loan for a new car. He knows that when he goes shopping for a loan that all of the banks must report the annual percentage rate as well as all other terms and conditions of the loan. This will allow him to easily compare loans from different banks. Which consumer protection law requires full disclosure on all loans?