HUD EXAM 2023/2024 GRADED A
WITH VERIFIED ANSWERS
Telephone Customer Services: correct answerAssistance provided by the financial institution over the
phone to help customers with banking complications.
Mobile Banking: correct answerAllows clients to utilize banking services with mobile technology.
Services often included in mobile banking include a view of up-to-date transactions, fund transfers, or
remote check deposits.
Overdraft Fee correct answerFee charged when an account does not have enough money to cover a
purchase and the financial institution loans money to complete the payment. This creates a negative
loan to repay, and interest will be charged on the balance.
Portion of score based on the number of recent credit inquiries, as well as new credit correct
answer10% New Credit
Negative type of credit used: correct answerFewer types of credit show limited profile information to
lenders, which means a
higher risk
Tracking income correct answer• Regular salary
• Temporary jobs
• Unemployment compensation • Public assistance
In the budget, do not include. correct answer• Pre-tax payroll deductions—Retirement fund
contributions and expenses like Flexible Spending Account
Credit score
,Credit reports can be useful with budgeting - T/F correct answerTrue
items to use when budgeting correct answer- Paychecks, direct deposit slips
• If self-employed, income and expenses sheet
• Additional income checks or cash
• Government benefits letters (SSI, unemployment, etc.)
Documents to use when budgeting correct answerUtility, insurance, and other bills
• Bank statements
• Credit card statements •
--Records about car registration or school supplies for estimated amount of expected periodic expense
A credit report contains information correct answer• History of accounts.
• Number of inquiries.
• Number of collections.
credit report overview correct answer1. Personal Information
2. Account/Trade Line Information
3. Public Records
4. Inquiries
5. Consumer Rights
personal information on credit info correct answerConsumer identification information, including name,
social security number, addresses, phone numbers, and employers
,Account/Trade Line Information on credit info correct answerInformation about each consumer credit
account, including payment history, account dates, credit limits, and balances owed
Public Records on credit info correct answerItems that are listed in the public record, including
bankruptcy, judgments, tax liens, and wage garnishments
Inquiries on credit info correct answerRequests initiated by a company or person for a consumer's credit
profile information
Consumer Rights on credit info correct answerInformation about consumer rights and protection for
reference (included in credit reports from the major credit reporting agencies, but not in most tri-merge
reports)
Positive capacity: correct answerLow credit utilization demonstrates good financial management.
negative capacity for credit correct answerHigh credit card balances demonstrate poor financial
management (i.e., client needs more access to credit).
negative example of payment history correct answerLien, judgment, collection account, charge-off
account, repossession, bankruptcy
Length of Credit History Positive correct answerLonger credit history provides more information for
lenders, which means lower risk.
Length of Credit History Negative correct answerNegative: Shorter credit history provides little to no
information for lenders, which means higher risk. Negative Examples: No credit history
negative example of length of credit history correct answerNo credit history
Type of Credit Used Positive: correct answerDifferent types of credit show variety. Variety shows lenders
that consumers can manage different types of credit.
, Negative Examples of type credit used: correct answerOnly having a student loan or only having credit
cards
Credit Score correct answerA numerical interpretation of a consumer's creditworthiness based on
information in his/her credit report
FICO score correct answerCredit scores are often referred to simply as FICO scores.
FICO (Fair Isaac Corporation) is the most commonly used scoring model for lending and credit decisions
in the U.S., though other scoring modules do exist.
FICO scores range from correct answer300 to 850 where higher is better.
Consumers have a FICO score from each of the three credit reporting agencies—Equifax, Experian, and
Transunion. Other credit scoring models do exist, so not all credit scores available for purchase online
are FICO scores
how credit scores are calculated. correct answer35% Account History Portion of score based on the
payment history of accounts, including late payments, delinquencies, judgments, and liens
30% Amounts Owed Portion of score based on the ratio of total credit extended to the amount of credit
owed
15% Length of Credit History Portion of score based on the overall length of credit history in the report,
as well as the average age of accounts
10% New Credit Portion of score based on the number of recent credit inquiries, as well as new credit
accounts
10% Types of Credit Used Portion of score based on the variety of accounts (e.g., credit card, auto loan,
mortgage)
WITH VERIFIED ANSWERS
Telephone Customer Services: correct answerAssistance provided by the financial institution over the
phone to help customers with banking complications.
Mobile Banking: correct answerAllows clients to utilize banking services with mobile technology.
Services often included in mobile banking include a view of up-to-date transactions, fund transfers, or
remote check deposits.
Overdraft Fee correct answerFee charged when an account does not have enough money to cover a
purchase and the financial institution loans money to complete the payment. This creates a negative
loan to repay, and interest will be charged on the balance.
Portion of score based on the number of recent credit inquiries, as well as new credit correct
answer10% New Credit
Negative type of credit used: correct answerFewer types of credit show limited profile information to
lenders, which means a
higher risk
Tracking income correct answer• Regular salary
• Temporary jobs
• Unemployment compensation • Public assistance
In the budget, do not include. correct answer• Pre-tax payroll deductions—Retirement fund
contributions and expenses like Flexible Spending Account
Credit score
,Credit reports can be useful with budgeting - T/F correct answerTrue
items to use when budgeting correct answer- Paychecks, direct deposit slips
• If self-employed, income and expenses sheet
• Additional income checks or cash
• Government benefits letters (SSI, unemployment, etc.)
Documents to use when budgeting correct answerUtility, insurance, and other bills
• Bank statements
• Credit card statements •
--Records about car registration or school supplies for estimated amount of expected periodic expense
A credit report contains information correct answer• History of accounts.
• Number of inquiries.
• Number of collections.
credit report overview correct answer1. Personal Information
2. Account/Trade Line Information
3. Public Records
4. Inquiries
5. Consumer Rights
personal information on credit info correct answerConsumer identification information, including name,
social security number, addresses, phone numbers, and employers
,Account/Trade Line Information on credit info correct answerInformation about each consumer credit
account, including payment history, account dates, credit limits, and balances owed
Public Records on credit info correct answerItems that are listed in the public record, including
bankruptcy, judgments, tax liens, and wage garnishments
Inquiries on credit info correct answerRequests initiated by a company or person for a consumer's credit
profile information
Consumer Rights on credit info correct answerInformation about consumer rights and protection for
reference (included in credit reports from the major credit reporting agencies, but not in most tri-merge
reports)
Positive capacity: correct answerLow credit utilization demonstrates good financial management.
negative capacity for credit correct answerHigh credit card balances demonstrate poor financial
management (i.e., client needs more access to credit).
negative example of payment history correct answerLien, judgment, collection account, charge-off
account, repossession, bankruptcy
Length of Credit History Positive correct answerLonger credit history provides more information for
lenders, which means lower risk.
Length of Credit History Negative correct answerNegative: Shorter credit history provides little to no
information for lenders, which means higher risk. Negative Examples: No credit history
negative example of length of credit history correct answerNo credit history
Type of Credit Used Positive: correct answerDifferent types of credit show variety. Variety shows lenders
that consumers can manage different types of credit.
, Negative Examples of type credit used: correct answerOnly having a student loan or only having credit
cards
Credit Score correct answerA numerical interpretation of a consumer's creditworthiness based on
information in his/her credit report
FICO score correct answerCredit scores are often referred to simply as FICO scores.
FICO (Fair Isaac Corporation) is the most commonly used scoring model for lending and credit decisions
in the U.S., though other scoring modules do exist.
FICO scores range from correct answer300 to 850 where higher is better.
Consumers have a FICO score from each of the three credit reporting agencies—Equifax, Experian, and
Transunion. Other credit scoring models do exist, so not all credit scores available for purchase online
are FICO scores
how credit scores are calculated. correct answer35% Account History Portion of score based on the
payment history of accounts, including late payments, delinquencies, judgments, and liens
30% Amounts Owed Portion of score based on the ratio of total credit extended to the amount of credit
owed
15% Length of Credit History Portion of score based on the overall length of credit history in the report,
as well as the average age of accounts
10% New Credit Portion of score based on the number of recent credit inquiries, as well as new credit
accounts
10% Types of Credit Used Portion of score based on the variety of accounts (e.g., credit card, auto loan,
mortgage)
