HUD Exam-Topic 1 with complete solutions

All of the following would help a counselor develop a realistic household budget, except: A. Payment information for a paid-off car B. Amount spent on groceries C. Rent payment information D. Monthly cable bill - Answer- A. Payment information for a paid-off car All of the following are reasons why it is important for a client to track income and expenses before finalizing a budget, except: A. It helps show clients that they actually spend less on some expenses than they think. B. It helps identify spending habits. C. It helps show clients that their spending and expenses are out of control. D. It helps define realistic and attainable goals and timelines. - Answer- It helps show clients that their spending and expenses are out of control. Which of the following is a "want" and not a "need"? A. Health care premium B. Car insurance C. Gym membership D. Rent - Answer- C. Gym membership All of the following are effective ways to decrease expenses, except: A. Cancel insurance policy B. Cancel cable service C. Stick to a shopping list D. Conserve energy in the home - Answer- A. Cancel insurance policy All of the following are effective strategies to increase income, except: A. Work over time B. Teach yoga C. Find a second job D. Factor in an anticipated raise - Answer- D. Factor in an anticipated raise Identify which information is used in determining a budget, and which information is not: A. Pay Stub B. Bank Statements C. Utility Bills D. Social Security Award Letter E. Annual Bonus F. Stock Dividends G. Employer Reimbursements H. Credit Score - Answer- E. Annual Bonus F. Stock Dividends G. Employer Reimbursements H. Credit Score Ray's commute on the bus takes over an hour, so he wants to buy a car as soon as possible, but he has poor credit and cannot obtain a loan right now. He thinks he can find a reliable car for about $2,000 and has about 20% of the total in the bank from his tax refund. If Ray's goal is to buy a car within 8 months, what is the minimum amount he needs to save each month? A. $150 B. $175 C. $200 D. $225 - Answer- C. $200 Rebecca helps determine that with adjustments Ray can set aside $320 each month to buy the car. How many months will he need to save this amount? A. At least 4 B. At least 5 C. At least 6 D. At least 7 - Answer- B. At least 5 Which section of a credit report will contain employer details? A. Consumer rights B. Account information C. Personal information D. Public records E. Inquiries - Answer- C. Personal information Which section of a credit report will contain information about a student loan? A. Personal information B. Public records C. Inquiries D. Consumer rights E. Account information - Answer- E. Account information Which section of a credit report will contain court information such as bankruptcy? A. Public records B. Inquiries C. Personal information D. Consumer rights E. Account information - Answer- A. Public records Which section of a credit report will show recent attempts to open a credit card? A. Personal information B. Public records C. Consumer rights D. Inquiries E. Account information - Answer- D. Inquiries Which section of a credit report will contain information about how to correct inaccuracies? A. Personal information B. Consumer rights C. Public records D. Inquiries E. Account information - Answer- B. Consumer rights Credit Score - Answer- A numerical interpretation of a consumer's creditworthiness based on information in his/her credit report Where should a client go to obtain free credit reports? A. . . . B C D - Answer- C. Place the letters in the correct sequence from the MOST important factor to the LEAST important factor that impacts the determination of a credit score. A. Amount of total credit used B. Number of inquiries on record C. History of delinquent payment D. Length of time accounts have been established - Answer- C,A,D,B Which complies with fair credit laws? A. An employer can check a credit report at any time. B. A vendor can display part of the credit card number on the sales receipt. C. A credit reporting agency can list information about a collection over eight years old. D. A creditor can acknowledge a consumer dispute after two months - Answer- B. A vendor can display part of the credit card number on the sales receipt. Which federal law protects a consumer's right to dispute a billing error associated with his or her credit card account? A. Fair and Accurate Credit Transactions Act (FACTA) B. Fair Credit Reporting Act (FCRA) C. Fair Credit Billing Act (FCBA) - Answer- C. Fair Credit Billing Act (FCBA) Fee charged to invalidate a check before it is cashed. A. Overdraft Fee B. Stop Payment Fee C. NSF Fee D. Service Fee - Answer- B. Stop Payment Fee Fee charged by a financial institution for account maintenance. A. Overdraft Fee B. Stop Payment Fee C. NSF Fee D. Service Fee - Answer- D. Service Fee Fee charged when an account does not have enough money to cover a purchase and the financial institution loans money to complete the payment. A. Overdraft Fee B. Stop Payment Fee C. NSF Fee D. Service Fee - Answer- A. Overdraft Fee Fee charged if there is not enough money in an account to cover a check payment or other purchase. A. Overdraft Fee B. Stop Payment Fee C. NSF Fee D. Service Fee - Answer- C. NSF Fee Emergency Fund - Answer- Living Expenses (During Unemployment): Living expenses following job loss can be covered temporarily with emergency funds. Medical Bill: Medical expenses are often unpredictable and can be covered with emergency funds. Car Repair: Car repairs are often hard to predict and can be covered with emergency funds. Large Purchase Fund - Answer- School Trips: This is an expense that can be anticipated in advance and saved for in a short-term large purchase account. Birthday Gifts: These are expenses that can be anticipated in advance and saved for in a short-term large purchase account. Electronic: This is an expense that can be anticipated or delayed, thus an ideal expense to save for in a short-term large purchase account. Which of the following information would be relevant to ask Richard in the session to determine if he is eligible for any of the tax credits outlined in this module? A. Where does he live? B. How is he submitting his taxes? C. Does he spend money on childcare? D. What is his credit limit? - Answer- C. Does he spend money on childcare? All of the following are immediate steps a client should take in the event of identity theft, except : A.