FICEP CUNA UPDATED FINAL PAPER QUESTIONS AND
SOLUTIONS GUARANTEE A+
✔✔What three basic things must a member do to prove they have been successful with
their financial goals? - ✔✔They make a small but significant change which moves them
toward a financial goal; The change toward their goal is lasting and not just a one-time
thing; They feel they can handle things on their own
✔✔How is the use of storytelling helpful in financial counseling? - ✔✔It provides
concrete examples of how others successfully tackled financial problems.
✔✔How can role-playing support financial changes within a family? - ✔✔It prepares
family members for situations where they must say "no" or take a different approach to
restrain spending.
✔✔What is a credit score? - ✔✔A snapshot of a particular time period in your credit
behavior.
✔✔Why do alternative forms of credit scores help some low-income members prove
they are credit worthy? - ✔✔These scores include data from non-traditional sources,
such as payday lenders.
✔✔Which statement correctly describes standard credit scores from all 3 major credit
reporting companies? - ✔✔The scores from the companies are very similar, but can
vary by 50 points or more.
✔✔How much of the payment history makes up a member's credit score? - ✔✔35%
✔✔What is the impact of just one late car payment on a credit score? - ✔✔It can drop
the score by 98 points.
✔✔What is the most important factor in determining the "amount owed" segment on a
credit score? - ✔✔The percentage of available credit used.
✔✔What is the impact of older and newer credit lines on the "length of credit history"
segment of the credit score? - ✔✔The older the credit line, the higher it will score.
✔✔What is a hard hit as it pertains to the "new credit accumulation" segment of the
credit score? - ✔✔A hard hit is a request for new credit that impacts your score.
✔✔Which practice is common among 49 percent of credit card holders? - ✔✔They
make only the minimum payment each month.
, ✔✔What type of credit experience should a member have to create a more favorable
impact on the the "types of credit used" segment of the credit score? - ✔✔Experience
with both installment and revolving credit.
✔✔How do retail credit cards typically compare to Visa or MasterCard credit cards
offered by reputable credit unions? - ✔✔Retail credit cards charge higher interest rates.
✔✔What is a difference between credit union credit card programs and other types of
providers? - ✔✔Credit unions charge the lowest interest rates and fees.
✔✔What is a potential consequence of accepting a new credit card with a teaser rate? -
✔✔It may entice you into incurring additional debt.
✔✔What can greatly increase the cost of having a credit card? - ✔✔Application fees,
annual fees, or processing fees.
✔✔What is the grace period? - ✔✔The number of days after a purchase is made before
interest is charged.
✔✔How can members in a financial bind manage their credit cards to maintain a good
credit score? - ✔✔They should pay on time, even if they can only afford the minimum
payment.
✔✔What is a secured credit card? - ✔✔One that requires the cardholder to maintain a
savings account as security for the card's line of credit.
✔✔What is a potential advantage of using a home equity loan to refinance credit card
debts? - ✔✔It allows the member to repay debt with lower monthly payments while
deducting the interest cost on tax returns.
✔✔What must the member change to successfully use home equity refinancing to help
reduce debt? - ✔✔The member must change their lifestyle to avoid incurring additional
debt.
✔✔What mortgage or home equity lending practice is often used by subprime lenders?
- ✔✔They often make loans for more than the value of the home.
✔✔How do home equity loans compare with home equity lines of credit (HELOC)? -
✔✔A home equity loan is an installment loan with set payments. A HELOC is a
revolving loan with a variable monthly payment.
✔✔What is often the most important role of the financial counselor? - ✔✔They help the
member see the pitfalls of past financial practices and learn better habits.
SOLUTIONS GUARANTEE A+
✔✔What three basic things must a member do to prove they have been successful with
their financial goals? - ✔✔They make a small but significant change which moves them
toward a financial goal; The change toward their goal is lasting and not just a one-time
thing; They feel they can handle things on their own
✔✔How is the use of storytelling helpful in financial counseling? - ✔✔It provides
concrete examples of how others successfully tackled financial problems.
✔✔How can role-playing support financial changes within a family? - ✔✔It prepares
family members for situations where they must say "no" or take a different approach to
restrain spending.
✔✔What is a credit score? - ✔✔A snapshot of a particular time period in your credit
behavior.
✔✔Why do alternative forms of credit scores help some low-income members prove
they are credit worthy? - ✔✔These scores include data from non-traditional sources,
such as payday lenders.
✔✔Which statement correctly describes standard credit scores from all 3 major credit
reporting companies? - ✔✔The scores from the companies are very similar, but can
vary by 50 points or more.
✔✔How much of the payment history makes up a member's credit score? - ✔✔35%
✔✔What is the impact of just one late car payment on a credit score? - ✔✔It can drop
the score by 98 points.
✔✔What is the most important factor in determining the "amount owed" segment on a
credit score? - ✔✔The percentage of available credit used.
✔✔What is the impact of older and newer credit lines on the "length of credit history"
segment of the credit score? - ✔✔The older the credit line, the higher it will score.
✔✔What is a hard hit as it pertains to the "new credit accumulation" segment of the
credit score? - ✔✔A hard hit is a request for new credit that impacts your score.
✔✔Which practice is common among 49 percent of credit card holders? - ✔✔They
make only the minimum payment each month.
, ✔✔What type of credit experience should a member have to create a more favorable
impact on the the "types of credit used" segment of the credit score? - ✔✔Experience
with both installment and revolving credit.
✔✔How do retail credit cards typically compare to Visa or MasterCard credit cards
offered by reputable credit unions? - ✔✔Retail credit cards charge higher interest rates.
✔✔What is a difference between credit union credit card programs and other types of
providers? - ✔✔Credit unions charge the lowest interest rates and fees.
✔✔What is a potential consequence of accepting a new credit card with a teaser rate? -
✔✔It may entice you into incurring additional debt.
✔✔What can greatly increase the cost of having a credit card? - ✔✔Application fees,
annual fees, or processing fees.
✔✔What is the grace period? - ✔✔The number of days after a purchase is made before
interest is charged.
✔✔How can members in a financial bind manage their credit cards to maintain a good
credit score? - ✔✔They should pay on time, even if they can only afford the minimum
payment.
✔✔What is a secured credit card? - ✔✔One that requires the cardholder to maintain a
savings account as security for the card's line of credit.
✔✔What is a potential advantage of using a home equity loan to refinance credit card
debts? - ✔✔It allows the member to repay debt with lower monthly payments while
deducting the interest cost on tax returns.
✔✔What must the member change to successfully use home equity refinancing to help
reduce debt? - ✔✔The member must change their lifestyle to avoid incurring additional
debt.
✔✔What mortgage or home equity lending practice is often used by subprime lenders?
- ✔✔They often make loans for more than the value of the home.
✔✔How do home equity loans compare with home equity lines of credit (HELOC)? -
✔✔A home equity loan is an installment loan with set payments. A HELOC is a
revolving loan with a variable monthly payment.
✔✔What is often the most important role of the financial counselor? - ✔✔They help the
member see the pitfalls of past financial practices and learn better habits.
