HUD Counselor Certification Practice Exam With
Complete Solution
Elements IN a Budget - ANSWER--Pay Stubs. -Bank Statement
-Utility Bill
-Soc. Sec. Award Letter
-Credit Card Debt
-Car Expenses
-Child Support
-Hobby Income (Avg.)
Elements NOT in a Budget - ANSWER--Stock Dividends
-Annual Bonus
-Reimbursements
-Credit Score
-Pretax Payroll Deduc.
Which information should be included in a Client Action Plan? - ANSWER-The client's
housing goal and the counselor's action steps
5 Sections of a Credit Report - ANSWER--Personal Information
-Account/Trade lines
-Public Records
-Inquiries
-Consumer Rights
Credit Report: Personal Info - ANSWER--Name
-SS#
-Address
-Phone #
-Employers
Credit Report: Account/Trade Lines - ANSWER-Information about each credit account:
-payment history
-account dates
-credit limits
-balances owed
Credit Report: Public Records - ANSWER--Bankruptcy
-Judgements
-Tax Liens
-Wage Garnishments
,Credit Report: Inquiries - ANSWER-Requests initiated by a company or person for a
consumer's credit profile information.
Credit Report: Consumer Rights - ANSWER-Information about consumer rights and
protection for reference.
Credit Score - ANSWER-A numerical interpretation of a consumer's creditworthiness
based on information in their credit report.
FICO Score - ANSWER-Fair Isaac Corporation (300-850)
Most commonly used scoring model.
5 Pieces to FICO Score - ANSWER-1. Account/Payment History
2. Amounts Owed
3. Length of Credit History
4. New Credit
5. Types (Mix) of Credit
Credit Score: Account History - ANSWER-35%
Portion of score based on payment history, including late payments, delinquencies,
judgements, and liens.
Credit Score: Amounts Owed - ANSWER-30%
Portion of score based on the ratio of total credit extended to the amount of credit owed.
Credit Score: Length of History - ANSWER-15%
Portion of score based on the overall length of credit history in the report, as well as the
average age of accounts.
Credit Score: New Credit - ANSWER-10%
Portion of score based on the # of recent credit inquiries, as well as new credit
accounts.
Credit Score: Types/Mix of Credit - ANSWER-10%
Portion of score based on the variety of accounts (credit card, auto loan, mortgage).
FCRA - ANSWER-Fair Credit Reporting Act
Fair Credit Reporting Act - ANSWER--Right to know what is in your file
-Right to dispute inaccurate/incomplete info on credit report
-Access to your file is limited (such as by employers)
-May seek damages from violators
-May have additional state rights
FACTA - ANSWER-Fair and Accurate Credit Transactions Act
, Fair and Accurate Credit Transactions Act - ANSWER--Right to free annual credit report
(annualcreditreport.com)
-Right to place fraud alert on file for 90 days
-Credit card #'s must be truncated
FCBA - ANSWER-Fair Credit Billing Act
Fair Credit Billing Act - ANSWER--Right to dispute billing errors on credit card. Must
send by mail in first 60 days. Creditor has 30 days to respond and 90 days to research.
-Must be billed in timely fashion. (at least 14 days before payment is due)
4 Steps Toward Asset Building - ANSWER-1. Choose the right bank or credit union
2. Build Savings for emergencies and large purchases
3. Invest for retirement
4. Take advantage of tax credits
3 Financial Institution Fees - ANSWER-1. Service Fees
2. Negligence Fees
3. Fund Access Features
Financial Institution: Service Fees - ANSWER--Account maintenance
-Wire transfer
-Check purchasing fee
-Money order/Cashier's check
Financial Institution: Negligence Fees - ANSWER--Overdraft fee (bank loans $$ to
complete payment)
-Overdraft protection transfer fee
-Stop payment fee
-NSF. Non-Sufficient Funds
-ATM transaction limit
Financial Institution: Fund Access Features - ANSWER--Branch location access
-ATM availability
-Online banking & Bill pay
-Mobile banking
-Telephone customer services
EITC - ANSWER-Earned Income Tax Credit
Earned Income Tax Credit - ANSWER--Individuals or families with low/moderate
income.
-Earned income includes wages, salaries, tips, net earnings of self-employed.
-Amount is based on income, marital status, # of children.
Complete Solution
Elements IN a Budget - ANSWER--Pay Stubs. -Bank Statement
-Utility Bill
-Soc. Sec. Award Letter
-Credit Card Debt
-Car Expenses
-Child Support
-Hobby Income (Avg.)
Elements NOT in a Budget - ANSWER--Stock Dividends
-Annual Bonus
-Reimbursements
-Credit Score
-Pretax Payroll Deduc.
Which information should be included in a Client Action Plan? - ANSWER-The client's
housing goal and the counselor's action steps
5 Sections of a Credit Report - ANSWER--Personal Information
-Account/Trade lines
-Public Records
-Inquiries
-Consumer Rights
Credit Report: Personal Info - ANSWER--Name
-SS#
-Address
-Phone #
-Employers
Credit Report: Account/Trade Lines - ANSWER-Information about each credit account:
-payment history
-account dates
-credit limits
-balances owed
Credit Report: Public Records - ANSWER--Bankruptcy
-Judgements
-Tax Liens
-Wage Garnishments
,Credit Report: Inquiries - ANSWER-Requests initiated by a company or person for a
consumer's credit profile information.
Credit Report: Consumer Rights - ANSWER-Information about consumer rights and
protection for reference.
Credit Score - ANSWER-A numerical interpretation of a consumer's creditworthiness
based on information in their credit report.
FICO Score - ANSWER-Fair Isaac Corporation (300-850)
Most commonly used scoring model.
5 Pieces to FICO Score - ANSWER-1. Account/Payment History
2. Amounts Owed
3. Length of Credit History
4. New Credit
5. Types (Mix) of Credit
Credit Score: Account History - ANSWER-35%
Portion of score based on payment history, including late payments, delinquencies,
judgements, and liens.
Credit Score: Amounts Owed - ANSWER-30%
Portion of score based on the ratio of total credit extended to the amount of credit owed.
Credit Score: Length of History - ANSWER-15%
Portion of score based on the overall length of credit history in the report, as well as the
average age of accounts.
Credit Score: New Credit - ANSWER-10%
Portion of score based on the # of recent credit inquiries, as well as new credit
accounts.
Credit Score: Types/Mix of Credit - ANSWER-10%
Portion of score based on the variety of accounts (credit card, auto loan, mortgage).
FCRA - ANSWER-Fair Credit Reporting Act
Fair Credit Reporting Act - ANSWER--Right to know what is in your file
-Right to dispute inaccurate/incomplete info on credit report
-Access to your file is limited (such as by employers)
-May seek damages from violators
-May have additional state rights
FACTA - ANSWER-Fair and Accurate Credit Transactions Act
, Fair and Accurate Credit Transactions Act - ANSWER--Right to free annual credit report
(annualcreditreport.com)
-Right to place fraud alert on file for 90 days
-Credit card #'s must be truncated
FCBA - ANSWER-Fair Credit Billing Act
Fair Credit Billing Act - ANSWER--Right to dispute billing errors on credit card. Must
send by mail in first 60 days. Creditor has 30 days to respond and 90 days to research.
-Must be billed in timely fashion. (at least 14 days before payment is due)
4 Steps Toward Asset Building - ANSWER-1. Choose the right bank or credit union
2. Build Savings for emergencies and large purchases
3. Invest for retirement
4. Take advantage of tax credits
3 Financial Institution Fees - ANSWER-1. Service Fees
2. Negligence Fees
3. Fund Access Features
Financial Institution: Service Fees - ANSWER--Account maintenance
-Wire transfer
-Check purchasing fee
-Money order/Cashier's check
Financial Institution: Negligence Fees - ANSWER--Overdraft fee (bank loans $$ to
complete payment)
-Overdraft protection transfer fee
-Stop payment fee
-NSF. Non-Sufficient Funds
-ATM transaction limit
Financial Institution: Fund Access Features - ANSWER--Branch location access
-ATM availability
-Online banking & Bill pay
-Mobile banking
-Telephone customer services
EITC - ANSWER-Earned Income Tax Credit
Earned Income Tax Credit - ANSWER--Individuals or families with low/moderate
income.
-Earned income includes wages, salaries, tips, net earnings of self-employed.
-Amount is based on income, marital status, # of children.
