HUD Housing Counseling Exam/ 357 Quizzes &
Correct Ans.
Steps in creating a budget - Answer: 1. Help client identify short + long-term goals
2. Track income
3. Track expenses
4. Adjust goals + budget *increase income *decrease expenses + debt %.
5. Create client action plan
Section of Credit Report: Public Records - Answer: Items that are listed in the
public record, including -bankruptcy
- judgments
-tax liens
- wage garnishments
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,Section of Credit Report: Personal information - Answer: Consumer identification
information, including:
-Name
- Social Security number
- Addresses
-Phone #
- Employer's
Section of Credit Report: Account / Trade line information - Answer: Info about
each consumer credit account, including:
- payment history
- account dates
- credit limit
- balances owed
Payment History - Answer: Timely / Late
- Payments:Positive: timely
- Negative: late - lien, judgment, collection account, charge-off account
Type of credit used - Answer: Positive: Different types of credit show variety -
demonstrates that consumers can manage different types of credit
Negative: Fever types show limited profile info - higher risk
Length of credit history - Answer: -How long a person has bad credit
Positive: Longer credit history provides more info for lenders - lower risk
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,Negative- shorter history provides little to no info for lenders - higher risk
Capacity Used - Answer: -How much of credit available has the person used
Positive: low credit utilization = financial management
Negative: High credit card balances = poor financial management - maxed out
credit cards
Strategies to increase income (9) - Answer: -Find second job
-Work Over time
-Negotiate higher salary / wage
-Sell assets (e.g. car)
-Hold a yard/garage sale
-Teach a skill / craft/ activity
-Sell a craft
_Charge rent (adult +dependents living @ home)
-Evaluate tax withholding's (if over-with holding) change to increase income
received)
Items to include when tracking expenses - Answer: Monthly bills (utilities, cell
phone, etc.) All Fixed monthly expenses all cash expenses
Seasonal or annual expenses (i.e car registration, gifts, holiday season, vacation)
Documents to use when tracking expenses - Answer: -Bills
-Bank statements
-Credit cards statements
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, -Records for estimated amount of expected periodic expense
Chapter 7 bankruptcy - Answer: Liquidation bankruptcy
-Process of selling non-exempt assets to repay creditors in Chapter 7 bankruptcy
-Must meet w/an attorney to determine ability to repay debts - means test
Tips for avoiding predatory lending - Answer: 1.Shop for a loan
2.Ask questions
3.Beware of deals that sound to o good to be true
4. Know and understand you financial situation
Credit Score - Answer: A numerical interpretation of a customer's
creditworthiness based on information in his/her credit report
How to fix:
No credit / Poor credit / Limited Credit - Answer: -Open a credit card
-Secured credit card
Items to include when tracking income - Answer: -Regular salary
-Temporary jobs
-Unemployment compensation
-Public assistance
Items not to include when tracking income - Answer: -Pre -tax payroll deductions
-Credit report
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Correct Ans.
Steps in creating a budget - Answer: 1. Help client identify short + long-term goals
2. Track income
3. Track expenses
4. Adjust goals + budget *increase income *decrease expenses + debt %.
5. Create client action plan
Section of Credit Report: Public Records - Answer: Items that are listed in the
public record, including -bankruptcy
- judgments
-tax liens
- wage garnishments
Page 1 of 81
,Section of Credit Report: Personal information - Answer: Consumer identification
information, including:
-Name
- Social Security number
- Addresses
-Phone #
- Employer's
Section of Credit Report: Account / Trade line information - Answer: Info about
each consumer credit account, including:
- payment history
- account dates
- credit limit
- balances owed
Payment History - Answer: Timely / Late
- Payments:Positive: timely
- Negative: late - lien, judgment, collection account, charge-off account
Type of credit used - Answer: Positive: Different types of credit show variety -
demonstrates that consumers can manage different types of credit
Negative: Fever types show limited profile info - higher risk
Length of credit history - Answer: -How long a person has bad credit
Positive: Longer credit history provides more info for lenders - lower risk
Page 2 of 81
,Negative- shorter history provides little to no info for lenders - higher risk
Capacity Used - Answer: -How much of credit available has the person used
Positive: low credit utilization = financial management
Negative: High credit card balances = poor financial management - maxed out
credit cards
Strategies to increase income (9) - Answer: -Find second job
-Work Over time
-Negotiate higher salary / wage
-Sell assets (e.g. car)
-Hold a yard/garage sale
-Teach a skill / craft/ activity
-Sell a craft
_Charge rent (adult +dependents living @ home)
-Evaluate tax withholding's (if over-with holding) change to increase income
received)
Items to include when tracking expenses - Answer: Monthly bills (utilities, cell
phone, etc.) All Fixed monthly expenses all cash expenses
Seasonal or annual expenses (i.e car registration, gifts, holiday season, vacation)
Documents to use when tracking expenses - Answer: -Bills
-Bank statements
-Credit cards statements
Page 3 of 81
, -Records for estimated amount of expected periodic expense
Chapter 7 bankruptcy - Answer: Liquidation bankruptcy
-Process of selling non-exempt assets to repay creditors in Chapter 7 bankruptcy
-Must meet w/an attorney to determine ability to repay debts - means test
Tips for avoiding predatory lending - Answer: 1.Shop for a loan
2.Ask questions
3.Beware of deals that sound to o good to be true
4. Know and understand you financial situation
Credit Score - Answer: A numerical interpretation of a customer's
creditworthiness based on information in his/her credit report
How to fix:
No credit / Poor credit / Limited Credit - Answer: -Open a credit card
-Secured credit card
Items to include when tracking income - Answer: -Regular salary
-Temporary jobs
-Unemployment compensation
-Public assistance
Items not to include when tracking income - Answer: -Pre -tax payroll deductions
-Credit report
Page 4 of 81
