Test your credit knowledge
The following questions are designed to help you remember the credit information just covered
in class.
Directions
In the spaces provided, answer each of the following questions about credit:
List five things you can do to build a credit history.
1.
2.
3.
4.
5.
When a prospective creditor evaluates a credit application, they look for the three Cs: Character,
Capital, and Capacity. For each of the following statements, write the letter that corresponds to each
statement’s specific characteristic.
a) Character b) Capital c) Capacity
6. Do you have a savings account?
7. Have you used credit before?
8. How long have you lived at your present address?
9. Do you have a steady job?
10. Do you pay your bills on time?
11. What are your current debts and your current living expenses?
List four things you can do to build a credit history.
12.
13.
14.
15.
In the space provided, write the letter of the type of credit each statement represents.
a) Single payment credit b) Installment credit c) Revolving credit
16. Monthly payment on a car loan
17. Monthly telephone bill
18. Monthly heating bill
19. Using a credit card to buy a new jacket from a department store and then paying the
charge off over several months
20. Using a major credit card to buy a pair of shoes and then paying the total amount of
the credit card balance within a month
For each of the following statements, write a T in the space provided if the statement is true, and
F in the space provided if the statement is false.
21. It is legal for a creditor to deny an applicant credit based on marital status or age.
22. If you are denied credit, the creditor is not legally obligated to explain why.
23. When creditors evaluate your income, they can’t legally refuse to consider income
from public assistance in the same manner as other income.
24. If you are refused credit because of a credit report, upon request from you, the lender
must give you the name and address of the credit bureau that issued the report.
25. Your credit report is available to anyone, regardless of the reason.
26. A debt collector has the right to contact you at any time of day or night.
27. To be within a safe debt load, your total credit should not exceed 20% of your net pay
after subtracting rent.
28. What should you do if you find there is inaccurate information on your credit report?
29. Generally, how long can a consumer reporting agency report unfavorable information?
30. How long can bankruptcy information be reported by a consumer reporting agency?
Test your credit knowledge
The following questions are designed to help you remember the credit information just covered
in class.
Directions
In the spaces provided, answer each of the following questions about credit:
List five things you can do to build a credit history.
1. Establish a steady work record.
2. Pay all bills promptly.
3. Open a checking account and don’t bounce checks.
4. Open a savings account and make regular monthly deposits.
5. Apply for a small loan using your savings account for collateral and then pay it back as agreed.
6. Get a co-signer for a loan and pay back the loan as agreed.
When a prospective creditor evaluates a credit application, they look for the three Cs: Character,
Capital, and Capacity. For each of the following statements, write the letter that corresponds to each
statement’s specific characteristic.
a) Character b) Capital c) Capacity
6. b Do you have a savings account?
7. a Have you used credit before?
8. a How long have you lived at your present address?
9. c Do you have a steady job?
10. a Do you pay your bills on time?
11. c What are your current debts and your current living expenses?
List four things you can do to build a credit history. Any of the following are fine…
Establish a steady work record
Pay all bills promptly
Open a checking account and don’t bounce checks
Apply for a local store credit card and make regular monthly payments
Apply for a small loan using your savings account as collateral
Get a co-signer on a loan and pay back the loan as agreed
In the space provided, write the letter of the type of credit each statement represents.
a) Single payment credit b) Installment credit c) Revolving credit
16. b Monthly payment on a car loan
17. a Monthly telephone bill
18. a Monthly heating bill
19. c Using a credit card to buy a new jacket from a department store and then paying the
charge off over several months
20. a Using a major credit card to buy a pair of shoes and then paying the total amount of
the credit card balance within a month
For each of the following statements, write a T in the space provided if the statement is true, and
F in the space provided if the statement is false.
21. F It is legal for a creditor to deny an applicant credit based on marital status or age.
22. F If you are denied credit, the creditor is not legally obligated to explain why.
23. T When creditors evaluate your income, they can’t legally refuse to consider income
from public assistance in the same manner as other income.
24. T If you are refused credit because of a credit report, upon request from you, the lender
must give you the name and address of the credit bureau that issued the report.
25. F Your credit report is available to anyone, regardless of the reason.
26. F A debt collector has the right to contact you at any time of day or night.
27. T To be within a safe debt load, your total credit should not exceed 20% of your net pay
after subtracting rent.
28. What should you do if you find there is inaccurate information on your credit report?
Contact the credit bureau. Under the Fair Credit Reporting Act, the credit bureau must investigate your
report.
29. Generally, how long can a consumer reporting agency report unfavorable information? 7 years
30. How long can bankruptcy information be reported by a consumer reporting agency? Up to 10
years
