Fool Proof Module 2 (High School) Questions and Answers Fully Solved

Fool Proof Module 2 (High School) Questions and Answers Fully Solved Which two statements give good definitions of financial credit? 1 Financial credit is an arrangement for you to pay at a later date. Loans and credit cards are forms of credit. 2 Financial credit is the list of the cast and production crew that runs at the end of a movie. 3 Financial credit is recognition by the school that you have fulfilled one of the study or course obligations toward graduation. 4 Financial credit (for instance, your credit rating) is one way that lenders, businesses, and employers may judge an individual's trustworthiness. A 2 and 3. B 1 and 3. C 3 and 4. D 1 and 4. D 1 and 4. What is the best way to improve your credit? A Hire a credit counseling agency. B Consult your parents on good borrowing practices. C Make all your payments on time, every time. D Make all your payments early except your credit cards. It is OK to pay them late. C Make all your payments on time, every time. Good credit equals power. Which statement best illustrates that power? A Having good credit makes you more dependent on others. B Having good credit impacts what job you get and what you pay for products and services. C Having good credit makes you less independent. D Having good credit gives you less buying power. B Having good credit impacts what job you get and what you pay for products and services. Good credit helps bring independence. Which statement best illustrates the fact that good credit helps bring independence? A Good credit can help you build a savings account. Because you pay less in interest when you have good credit, you are able to save more. Money in your pocket (or your savings account) always gives you more options than not having money in your pocket. B Good credit means you can be entirely independent and don't have to pay your bills on time. C Good credit means you have to live at home with your parents after college because you cannot get an apartment. D Good credit means you always have to pay more for risk based items like car insurance. A Good credit can help you build a savings account. Because you pay less in interest when you have good credit, you are able to save more. Money in your pocket (or your savings account) always gives you more options than not having money in your pocket. Good credit gives you options. Bad credit takes away your options. Choose the one correct answer. A You have good credit. You can choose the credit card with the lowest interest rate. B You have bad credit. You are forced to take the credit card which charges rip-off rates. C You have bad credit. You can easily get a store charge card. D Both A and B. D Both A and B. Credit is an arrangement for you to pay at a later date. It is one way to determine trustworthiness. True False True Which of the following people has "paid on time," an important requirement in credit agreements? A Suzan borrowed $400 from her grandmother to buy an iPad and promised to pay $10 a week for 40 weeks until the loan was paid back. Suzan missed about 8 weekly payments but managed to pay her grandmother the whole amount by the end of the 40 weeks. B Carlos moved into his own apartment about a year ago. The gas and electric bills are usually due on the 25th of the month. Carlos faithfully pays those bills on the 2nd of the next month when he gets paid. C Tamara's parents co-signed a car loan for her new wheels. Her monthly payment is due by the 15th of each month. So far she has made the payment each month. But on three months, she sent her payment after the due date because she had not yet received her bi-weekly paycheck from her part-time job. One time she was more than 30 days late. D Josh has a 36-month loan f D Josh has a 36-month loan for his new truck. Each month's payment is due by the 10th of the month. Josh always mails his coupon and payment by the first of the month. Many companies deliberately give you repayment plans that make sure it will take you decades to pay your debt. True False True What is a "debt-to-income" ratio? A How much money you have to pay back on your income. B How much money you owe in total versus how much you make. C How much money you have to make every year in your job. D How much money you owe on your student loan compared with how much you want to make in your job. B How much money you owe in total versus how much you make. Why do businesses or individuals considering giving you credit look at your "debt-to-income" ratio? A They are curious snoops. B They want to see if you have enough total income to pay off all your bills. If you have the income to pay off all your bills, you are probably a better "risk." C Potential lenders want to know if you can do "ratio math problems." D They want to see if you can save money. B They want to see if you have enough total income to pay off all your bills. If you have the income to pay off all your bills, you are probably a better "risk." Your parents' credit score determines your credit score. True False False You have to be rich to have a good credit score. True False False Which statement is true? A It's really easy to mess up your credit score. B It's hard to mess up your credit score. A It's really easy to mess up your credit score. How long you've had an account - like a credit card or a cell phone account - helps to determine your credit score. True False True Why would the length of time you have had a checking or savings account help determine your credit score? A If you've had an account a long time, the company knows how to spell your name right and they will not mistake you for somebody else. B Potential lenders, businesses or employers want to see your "track record: how you pay over a long period of time." Anybody can make one payment on time. What counts is how you pay over time. C If you have an account over a long period of time, the company knows that you have not moved recently and it would know how to find you, if needed. D If you have an account a long time, the company knows that you are serious about your finances. B Potential lenders, businesses or employers want to see your "track record: how you pay over a long period of time." Anybody can make one payment on time. What counts is how you pay over time. You loan your cell phone to a pal who runs up your bill. Whose credit will be hurt if the bill isn't paid? A My pal's - he ran up the charges, not me. B Mine - I am always responsible for my accounts. C No one's - I am protected in my cell phone plan from this type of usage. D No one's - I am too young to have a negative credit. B Mine - I am always responsible for my accounts. You own a credit bureau. You're trying to decide which person is the better credit risk. Which statement would you choose as the best credit risk? A Sarah borrowed $50 from her aunt to buy some DVD's when they were out shopping. She just paid her back in two installments when she received her paychecks from the fast-food joint where she works part-time. B Tyler has just signed up for a two-year cell-phone account. For the first five months, he has paid on time. It's the only kind of credit account he has. C Ted is just about to pay off his 36-month loan on his used RAV4. He's made 35 monthly payments on time to his credit union and is sending the 36th payment in on time, too. D Rachel has been living with roommates in their own apartment at college for 18 months. The lease and utilities are in her roommate's name. Rachel says she paid the bills. But the bills weren't in Rachel's name. C Ted is just about to pay off his 36-month loan on his used RAV4. He's made 35 monthly payments on time to his credit union and is sending the 36th payment in on time, too. Bill shares an apartment with Matt. The lease and all the utilities are in Matt's name. Bill pays his rent, and his share of the utility bills on time. Why does this not help Bill build a positive credit score? A He only pays half of the lease and utility bills. B The lease and utility bills are not in his name. C Matt does not pay the bills on time. D Matt does not tell the landlord Bill is living there. B The lease and utility bills are not in his name.