Study Guide and Quiz Answers

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1
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Which of the following things can help you get a lower interest rate when you receive a loan?

A
A low credit score
B
A history of defaulting
C
Using all of your available credit
D
Collateral
2
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If you co-sign for a friend's credit card, what is the danger to you if your friend fails to pay?

A
You might get secured credit.
B
You might have to pay extra money in taxes.
C
Your credit score might go down.
D
Your credit score might go up.
3

How is a line of credit similar to a credit card?

A
Interest is charged only on the amount you actually borrow.
B
The interest rates are the same.
C
They both require co-signers.
D
Lenders don't check your credit score.
4

Which of the following is an example of revolving credit?

A
A loan that uses collateral
B
A loan that doesn't use collateral
C
A credit card
D
A single-payment loan
5

What do you need to provide in order to get secured credit?

A
An asset
B
A co-signer
C
A credit card
D
A tax refund
6

If you use credit, what are you creating?

A
A line of credit
B
Debt
C
Collateral
D
A default
8

Which of the following is a strategy for using credit wisely while improving your credit score?

A
Pay off your credit card in full each month.
B
Use as much of your total available credit as you can.
C
Pay exactly the minimum payment on your credit cards each month.
D
Avoid using your credit card.
13

Why are companies required to perform payroll withholding?

A
To make sure employees are being paid fairly
B
To make sure employees can pay their taxes
C
To help employees save for retirement
D
To help the company pay its share of taxes
17

What do you need to provide in order to get secured credit?

A
An asset
B
A co-signer
C
A credit card
D
A tax refund
18

If you co-sign for a friend's credit card, what is the danger to you if your friend fails to pay?

A
You might get secured credit.
B
You might have to pay extra money in taxes.
C
Your credit score might go down.
D
Your credit score might go up.
19

Which of the following things can help you get a lower interest rate when you receive a loan?

A
A low credit score
B
A history of defaulting
C
Using all of your available credit
D
Collateral
20

Which of the following is a strategy for using credit wisely while improving your credit score?

A
Pay off your credit card in full each month.
B
Use as much of your total available credit as you can.
C
Pay exactly the minimum payment on your credit cards each month.
D
Avoid using your credit card.

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