Understanding Financial Credit and Borrowing Quiz

Test your knowledge on credit types, loans, interest rates, and creditworthiness factors with this insightful quiz!

#1

Which of the following is a type of financial credit that does not require collateral?

Credit card
Mortgage loan
Auto loan
Student loan
#2

Which of the following is a characteristic of a secured loan?

Requires collateral
No interest charged
Short repayment period
Low credit score requirement
#3

Which of the following is a common form of unsecured loan?

Mortgage
Auto loan
Payday loan
Student loan
#4

Which of the following is a type of credit that typically requires a down payment?

Credit card
Personal loan
Installment loan
Auto loan
#5

What is the term used to describe the fee charged by a lender for processing a loan application?

Interest
APR
Origination fee
Closing cost
#6

What is the term used to describe the interest rate that banks charge their most creditworthy customers?

Prime rate
Variable rate
Fixed rate
APR
#7

What is the maximum number of days you typically have to repay a payday loan?

30 days
60 days
90 days
120 days
#8

What is the term used to describe a borrower who fails to make timely payments on a loan?

Default
Prime
Collateral
APR
#9

What type of interest rate remains constant throughout the term of a loan?

Fixed rate
Variable rate
Prime rate
APR
#10

What does FICO stand for in the context of credit scoring?

Financial Information and Credit Oversight
Federal Interest Calculation Organization
Fair Isaac Corporation
Finance and Insurance Commission Organization
#11

What is the term used to describe the total amount of debt owed by an individual or organization?

Credit score
Credit utilization ratio
Debt load
Debt-to-income ratio
#12

What is the term used to describe the process of assessing a borrower's creditworthiness?

Credit approval
Credit check
Credit scoring
Credit evaluation
#13

Which of the following is not a factor used by lenders to determine creditworthiness?

Credit score
Income level
Gender
Debt-to-income ratio
#14

What does the acronym 'APR' stand for in the context of borrowing?

Annual Percentage Rate
Adjusted Percentage Ratio
Average Payment Return
Annual Percentage Return
#15

Which of the following is a factor that can affect your credit score negatively?

Making on-time payments
Closing old credit accounts
Maintaining a low credit utilization ratio
Maxing out credit cards
#16

What is the term used to describe the maximum amount a borrower can spend using a credit card or line of credit?

Credit limit
Credit score
Credit utilization ratio
Debt-to-income ratio
#17

Which of the following is a factor that can positively impact your credit score?

Opening multiple new credit accounts
Keeping credit card balances close to the credit limit
Having a long credit history
Missing loan payments
#18

What is the term used to describe the process of combining multiple debts into a single, larger loan?

Debt consolidation
Debt settlement
Debt restructuring
Debt relief
#19

What does the Debt-to-Income (DTI) ratio measure?

The amount of debt compared to income
The amount of credit used compared to credit available
The likelihood of default on a loan
The interest rate charged on a loan

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