FICEP CERTIFICATION EXAM QUESTIONS WITH COMPLETE A GRADED SOLUTIONS

FICEP CERTIFICATION EXAM QUESTIONS WITH COMPLETE A GRADED SOLUTIONS When determining if a vehicle is affordable, which of the following is NOT important to consider? a. Purchase price b. Maintenance c. Insurance d. Ability to pay online - Answer-Ability to pay online Which type of savings helps one cope when the unthinkable occurs? a. Set-aside b. Retirement c. Emergency d. Holiday - Answer-Emergency A good action pan includes: a. the counselor completing a budget and giving it to the member b. a list of steps and timeline for the member to complete c. a list of family members to contact d. the counselor making creditor calls - Answer-a list of steps and timeline for the member to complete Which of the following is NOT an example of ways members may start saving: a. After a loan is paid off, deposit the old loan payment amount to savings b. Increase living standard expenses with each new raise c. Depositing bonuses or tax refunds to savings d. Have a portion of each paycheck directly deposited to a savings account - Answer-Increase living standard expenses with each new raise "Safety-net savings" is designed to help members: a. Through a period of reduced or lost income. b. Pay for occasional or periodic expenses. c. Reach a long-term goal. d. Sustain income during retirement. - Answer-Through a period of reduced or lost income. One way to overcome a member's objection to financial counseling is to: a. Simply dismiss any negative comments a member makes b. Speak in a loud tone to reinforce authority as a counselor c. Refer member to another financial counselor d. Express confidence in member's ability to address problem - Answer-Express confidence in member's ability to address problem You can help couples and families who have difficulties talking through money issues by doing all of the following except: a. Have each person write down individual goals and then share with each other b. Discuss individual goals and how members may work together to accomplish them c. Meet with members separately for financial counseling d. Agree on a scheduled time to check goal progress and make modifications - Answer-meet with members separately for financial counseling Which of the following statements is FALSE regarding the steps that can help families change habits? a. Children can be absent from discussions because spending changes will not affect them. b. Parents must present a united front when talking with children about money c. Recognizing progress with positive feedback can keep everyone focused on the goals. d. Once problem areas are identified, develop strategies to save money. - Answer-Children can be absent from discussions because spending changes will not affect them. When dealing with credit during a divorce, which of the following is FALSE? a. A divorce decree may specify which party is responsible for repaying which debts. b. If one spouse falls behind on payments of a jointly held account, both parties are responsibilities. c. Martial status not a factor in credit scoring systems d. Late payments on jointly held debts will not be reflected on both credit reports. - Answer-Late payments on jointly held debts will not be reflected on both credit reports. Seasonal employees must: a. Not be concerned with ebbs and flows in monthly income b. Plan for times when income is low c. Avoid overuse of outside resources like food share programs d. Only worry about current income and not dwell on future shortfalls - Answer-Plan for times when income is low When you own your own business, accounts payable is the: a. Amount of money others owe you b. Money that you anticipate the government will reimburse you c. Amount of money you owe others d. Difference between your assets and liabilities - Answer-Amount of money you owe others Which of the following statement is false? a. Using credit only builds a positive credit history if the lender submits information to a CRA. b. Lenders regularly report on-time and delinquent payments c. Becoming an authorized user means the user is required to acquire debt d. Unpaid overdrafts may be reported to CRAs - Answer-Becoming an authorized user means the user is required to acquire debt Your credit report will NOT include a. Identification and employment information b. Income and asset information c. Payment history d. Public record information - Answer-Income and asset information Identification and employment information includes all EXCEPT a. Name b. Date of birth c. Spouse's name d. Race/ethnicity information - Answer-Race/ethnicity information Which of the following statements about credit score analysis is FALSE: a. Payment history has the least influence on one's credit score b. to improve one's capacity, a member needs to pay off debt rather than transferring it c. The largest single influence on a credit score is an individuals payment history d. It can be counterproductive to close older, well-established credit lines - Answer-Payment history has the least influence on one's credit score Which of the following statements about actions that lower credit scores is false? a. The 3 ways late payments can hurt credit scores are frequency, recent, and severity b. Maxed-out credit cards may reduce credit scores by as much as 100 points c. Closed accounts in good standing are usually removed from the credit report within ten years d. inquiries do not impact credit scores - Answer-inquiries do not impact credit scores Individuals with high credit scores have: a. History of closing loans soon after opening them b. High percentage of available revolving credit c. Many credit cards or loans with balances d. Low percentage of available revolving credit - Answer-High percentage of available revolving credit Which of the following statements is true? a. A judgement is an arbitrary ruling that settles a lawsuit by defining the obligations of the parties involved. b. A lien is a verbal claim against a specific item owned by a debtor c. There is a federal law that says wages can be garnished for child support payments d. A garnishment foes not require an employer to withhold a specific amount from an employee's wages to repay debt - Answer-There is a federal law that says wages can be garnished for child support payments When dealing with creditors/collectors, it is important for members to: a. Be proactive b. Avoid them altogether c. Be honest and tell the collector they have no intention of paying d. Extend the time to pay the collections for as long as possible - Answer-Be proactive Which of the following statements is false? a. Once a collection is paid, the negative history is immediately removed from one's credit report b. Collection agencies are open to the negotiation. c. In some situations, it may be beneficial to settle a debt in collections. d. Members should never agree to an unaffordable payment plan - Answer-Once a collection is paid, the negative history is immediately removed from one's credit report The amount a cardholder is required to pay each month is the: a. Late fee. b. Annual fee. c. Grace period. d. Minimum payment. - Answer-Minimum payment. Which of the following is an advantage of using a credit card? a. There is not a fee for a late payments b. One's credit score is not impacted by late payments c. Peace of mind knowing funds are available d. Identifying theft is impossible when using a credit card - Answer-Peace of mind knowing funds are available