Understanding Creditworthiness and Financial Health Quiz
Test your credit risk management knowledge with questions on creditworthiness, APR, credit bureaus, debt-to-income ratio, and more.
#1
Which of the following factors is NOT typically considered when evaluating creditworthiness?
Credit score
Income level
Favorite color
Payment history
#2
What does APR stand for in the context of loans?
Annual Payment Rate
Average Principal Return
Annual Percentage Rate
Average Payment Requirement
#3
Which of the following is NOT a type of credit?
Revolving credit
Installment credit
Closed credit
Open credit
#4
What does the term 'secured debt' mean?
Debt with high interest rates
Debt backed by collateral
Debt with no interest
Debt without a repayment plan
#5
What is a credit limit?
The maximum amount of money you can withdraw from a bank account
The maximum amount of money you can borrow on a credit card
The minimum amount of money required to open a credit card account
The interest rate charged on a loan
#6
What does the term 'credit report' refer to?
A record of your borrowing and repayment history
A list of available credit options
A summary of your income and expenses
A report on your investment portfolio
#7
Which of the following is NOT a credit bureau?
Experian
TransUnion
S&P Global
Equifax
#8
What does the debt-to-income ratio (DTI) measure?
Amount of debt compared to income
Credit card utilization
Interest rates on loans
Number of credit inquiries
#9
What is a FICO score used for?
To measure financial health
To evaluate job performance
To assess creditworthiness
To determine insurance premiums
#10
What is the recommended credit utilization ratio for maintaining a good credit score?
#11
What is a derogatory mark on a credit report?
A positive notation
A negative notation
An inquiry from a lender
A statement of creditworthiness
#12
What is the debt snowball method?
A strategy to increase debt quickly
A method of paying off debt starting with the smallest balance first
A technique to accumulate debt over time
A method of paying off debt starting with the largest balance first
#13
Which of the following actions can help improve your credit score?
Closing old credit accounts
Making only minimum payments on credit cards
Applying for multiple new credit cards at once
Paying bills on time
#14
What is the purpose of a cosigner on a loan?
To make payments if the borrower defaults
To increase the interest rate
To decrease the loan amount
To negotiate with creditors
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