UGBA 196- Midterm questions and answers rated A+ 2023/2024

UGBA 196- Midterm FICO Score (Definition) - correct answer Mathematical Number used by lenders to determine if you're a good or bad credit risk Debt-to-Credit Ratio - correct answer Total balance of your credit cards and other loans compared to your total credit limit Add up all your debt/credit ratios What percent do you want your debt-to-credit ratio to be? - correct answer 30%-33% Highest possible FICO Score? - correct answer 850 (delinquency rate of 1%) What's the best way to establish good credit? - correct answer Pay your bills on time over time, keep your debt-to-credit ratio near 30% and avoid DUIs, bill collectors, and other "character flaws" (alt: Borrow Money and pay it back on time according to its terms) revolving credit (definition) - correct answer credit (or funds) made available to you for your use at any time, subject to the terms of repayment (EX - credit cards b/c you use funds, pay at least min. payment; as you repay portion of funds, you can make new charges up to your max credit limit) what is a credit card? - correct answer an unsecured line of credit which represents the fact that a bank or other lender is wiling to lend you $ If you exceed the credit limit, whats the most the bank could charge you? - correct answer A credit card company cannot charge a late payment fee that is greater than your minimum payment. If the minimum payment is $20, your late payment fee cannot be more than $20 And (ex: if you exceed your credit limit by $5, you cannot be charged an over-the-limit fee of more than $5) Emergency Fund - correct answer Savings to cover 3-6 months of living expenses in the event of illness, job loss, or other emergencies. If you're a victim of identity theft - correct answer >Notify the credit card company or bank or agency immediately >Put a "fraud alert" on your account >close all accounts ASAP ( not just bank accounts but also places like amazon, itunes, etc.) >contact all of your creditors >file a police report and keep the number of the report What do you do if you experience credit card theft? - correct answer >Contact the credit card issuer or bank immediately. >Close the account immediately. >Ask for a new card on a new account. >Check your credit card statements every month. What do you do if you overpay on your credit card?* - correct answer Write to request a refund. (depending on your credit card company, as soon as an over-payment on a completely paid down balance is received, that amount is often credited immediately to your account. If you didn't get a credit [or if you did, but haven't used it], write to your credit card company to request a refund.) Whats the difference between earned and unearned income? - correct answer _earned income:_ Includes wages, salary, bonuses, commissions, royalties, tips and other money you have received for your personal services. _unearned income:_Taxable interest, ordinary and qualified dividends, business profits or losses, capital gains or losses on investments, pension receipts, certain tax refunds, social security benefits,