FNCE 2820 Exam Questions and Complete
Answers| Verified 100% Correct| Newest 2024-
2025
Factors influencing credit score - ✔✔payment history, amount of credit, length of
credit, types of credit
How to build a good credit score - ✔✔Strategy :
1. open a line of credit; for example: apply for and obtain a credit card
2. buy necessary items like groceries and gas
3. with the first monthly statement, pay off the balance
4. repeat this process each month - keeping the account active
How to keep a good credit score - ✔✔1. try never to miss a payment. If you do miss
one, get and stay current as quickly as possible.
- Basic rules to optimize your credit score
1. keep revolving debt balance low
2. apply the ratio rule (credit usage ratio)
3. avoid applying for lots of new credit cards at one time
4. vary your credit mix
Credit report - ✔✔does NOT show your net worth
- has information about your credit activity and current credit situation (loan paying
history and status of credit accounts
, - individuals with low credit scores are MORE likely to be : charged higher interest rates
on loans and pay higher insurance premiums
A credit report is best defined by which of the following statements? - ✔✔A summary
of an individual's credit history
Housing and. car purchases - ✔✔1. buy a used car (depreciation)
2. try not to take out a loan for a car
vehicle purchase terms - ✔✔- principal : amount you borrow to buy a car loan for a
car
- interest : amount you owe
- fees : what other fees are there
APY vs APR - ✔✔Annual Percentage Yield vs. Annual Percentage Rate
Housing terms - ✔✔Loans :
1. principal is the amount you borrowed
2. interest is the amount you pay
*** 15 vs. 30 year loans
with a 15 year loan you typically pay HALF of what you do with a 30 year loan
Housing terms - ✔✔if your goal is to minimize the total interest you pay on a
mortgage you should consider a 15 year mortgage
Homeowner's Equity - ✔✔Market price of the home - Amount of loan =
homeowner's equity
Answers| Verified 100% Correct| Newest 2024-
2025
Factors influencing credit score - ✔✔payment history, amount of credit, length of
credit, types of credit
How to build a good credit score - ✔✔Strategy :
1. open a line of credit; for example: apply for and obtain a credit card
2. buy necessary items like groceries and gas
3. with the first monthly statement, pay off the balance
4. repeat this process each month - keeping the account active
How to keep a good credit score - ✔✔1. try never to miss a payment. If you do miss
one, get and stay current as quickly as possible.
- Basic rules to optimize your credit score
1. keep revolving debt balance low
2. apply the ratio rule (credit usage ratio)
3. avoid applying for lots of new credit cards at one time
4. vary your credit mix
Credit report - ✔✔does NOT show your net worth
- has information about your credit activity and current credit situation (loan paying
history and status of credit accounts
, - individuals with low credit scores are MORE likely to be : charged higher interest rates
on loans and pay higher insurance premiums
A credit report is best defined by which of the following statements? - ✔✔A summary
of an individual's credit history
Housing and. car purchases - ✔✔1. buy a used car (depreciation)
2. try not to take out a loan for a car
vehicle purchase terms - ✔✔- principal : amount you borrow to buy a car loan for a
car
- interest : amount you owe
- fees : what other fees are there
APY vs APR - ✔✔Annual Percentage Yield vs. Annual Percentage Rate
Housing terms - ✔✔Loans :
1. principal is the amount you borrowed
2. interest is the amount you pay
*** 15 vs. 30 year loans
with a 15 year loan you typically pay HALF of what you do with a 30 year loan
Housing terms - ✔✔if your goal is to minimize the total interest you pay on a
mortgage you should consider a 15 year mortgage
Homeowner's Equity - ✔✔Market price of the home - Amount of loan =
homeowner's equity
