Personal Finance

Credit Payment History The most important factor used in the FICO credit scoring model
Credit Report Document showing information reporting your payment history and past use of credit
Dumpster Diving Obtaining information on a person’s identity from discarded items
Firewall and Virus protection Something you should install on your computer to protect you from hackers and worms
FTC The federal agency that acts as a clearinghouse for all identity theft complaints
Installment Credit A borrowing arrangement in which regular monthly payments of principal and interest must be made
Revolving open-end credit Credit arrangement where the balance may be paid off monthly and interest is only charged on the remaining unpaid amount
Skimming Copying credit information from the magnetic strip on a credit card
Social Security Something you should never carry in your wallet
Telephone Company Extends credit by providing a service and billing for the service at the end of the time period
The cost of using credit may result in—spending and —debt excessive; increased
All of the following situations are valid reasons to borrow funds EXCEPT borrowing for everyday living expenses
Which of the following will NOT help you establish a good credit history? making as many purchases as possible with cash
Credit extended to consumers for short periods of time to make specific purchases revolving open-end credit
The law that prohibits denying credit due to gender, age, race, national origin, religion, or marital status is Equal Credit Opportunity Act
Which of the following is NOT one of the three primary credit bureaus Fair Isaac Corporation
Which of the following is NOT a factor in the FICO credit scoring? Marital status
Credit scores in the 500-600 range will result in higher interest rates
Which of the following would NOT help improve your credit score? applying for more credit cards
Generally, the—the credit history, the—the credit limit Better; higher
Which of the following items should NOT be removed from your wallet? Drivers license
If you think that your identity has been stolen, the FTC recommends you do all of the following EXCEPT destroy all of your credit cards
The Identity Theft and Assumption Deterrence Act has designated which federal agency as the central clearinghouse for all identity theft complaints? FTC
If you refrain from using any credit, it will assume you the lowest possible interest rate when you decide to use it. False
Funds provide by a borrower that will be repaid in the future, with interest, is credit. False
In order to have credit in the future, you must have used it wisely in the past. True
Excessive use of credit can impair your ability to save money. True
Using more credit than can be repaid is a primary cause of individual bankruptcies. True.
For creating credit scores, credit bureaus rely on a model created by the Fair Isaac Corporation. True
With a credit rating of over 500, you should have no problem getting approval for credit purchases. False
The Equal Credit Opportunity Act allows a creditor to deny credit based on a person’s age. False
Federal law requires creditors to explain the reasons for the denial of credit. True
The longer you maintain relationships with creditors, the lower will be our credit score. False
If you find that you will not be able to make credit payments on time, the best course of action is to immediately notify the creditor. True
Most identity theft victims discover the crime in a reactive as opposed to a proactive manner. True
If you are a victim of identity theft, you may be turned down for employment as a result of incorrect background information. True
The personal cost of identity theft is difficult to measure, but calculating the financial cost is an easier task. True
Obtaining money, goods, and services are the only reasons for identity theft. False
Identity theft only occurs through individuals who do not have legitimate access to your information. False
You should be very selective in shredding documents and when in doubt, do no shred them. False
Making sure that you have an adequate credit standing should be an important part of your overall financial plan. True
If your credit report contains deficiencies, there is really nothing you can do to correct them. False

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