Credit Knowledge QuizOnline version Test your understanding of credit, debt, and financial terms with this engaging quiz! Keep playing to practice your Credit Vocabulary. by Kristine Vester 1 What is capacity in terms of credit? a The amount of collateral you have. b Your ability to repay a loan, based on your income. c Your credit history and past repayments. d The total debt you owe. 2 What does character refer to in credit assessments? a Your credit history and past loan repayments. b Your job stability. c Your current debts. d The amount of money you can borrow. 3 What is collateral? a Your credit score. b Your monthly income. c Your spending habits. d Something that can be taken if you don't repay your loans. 4 What does default mean? a When you consolidate your debts. b When you don’t pay back your loans. c When you borrow more money. d When you pay back your loans early. 5 What is consumer debt? a Debt from business loans. b Debt from mortgage loans. c Debt incurred from purchasing consumable goods. d Debt from student loans. 6 What is garnishment? a When you borrow money. b When you receive a loan. c When money is taken from your pay to pay debts. d When you pay off a loan. 7 What does overspending mean? a Saving more money than you need. b Spending more money than you should, leading to debt. c Investing money wisely. d Paying off debts quickly. 8 What is Debtors Anonymous? a A support group for those addicted to spending money. b A loan company. c A financial planning course. d A credit score service. 9 What do auto finance companies do? a They provide loans to buy cars. b They provide credit cards. c They sell cars. d They offer insurance for cars. 10 What does ownership mean in financial terms? a It means that something is yours. b It means you owe money. c It means you can borrow money. d It means you are in debt. 11 What is a financial institution where you can keep your money safe? a Tax preparers b Credit card companies c Mortgage brokers d Bank 12 Who helps you file your taxes and may offer you a loan? a Banks b Credit card companies c Mortgage brokers d Tax preparers 13 Who assists you in obtaining a mortgage to buy a home? a Banks b Credit card companies c Tax preparers d Mortgage brokers/lenders 14 What is the term for the total amount you owe on a loan or credit card? a Credit limit b Balance owed c Due date d Grace period 15 What is the day a bill is due called? a Grace period b Late fee c Penalty d Due date 16 What is the extra time given after a payment is due before a late fee is charged? a Grace period b Credit limit c Late fee d Due date 17 What is the extra amount you pay if you pay a bill late? a Penalty b Grace period c Late fee d Credit limit 18 What is the term for an extra amount paid if a bill is late? a Grace period b Late fee c Due date d Penalty 19 What is the highest amount you can borrow on a credit card? a Grace period b Due date c Credit limit d Balance owed 20 What type of company issues credit cards? a Credit card companies b Tax preparers c Banks d Mortgage brokers 21 What is a Line of Credit? a An extra charge for a financial service. b An interest rate that can change. c The lowest payment you can pay on your loan. d This is the highest amount you can borrow or put on a credit card. 22 What does Minimum Amount Due refer to? a The lowest payment you can pay on your loan or credit card for the month. b An interest rate that will stay the same. c The total interest charged on a loan. d The highest amount you can borrow. 23 What is a Finance Charge? a The total amount borrowed. b The lowest payment due on a loan. c An extra charge for a financial service- in addition to the interest rate. d An interest rate that can change. 24 What does APR stand for? a Annual Principal Rate. b Average Payment Rate. c The interest or percentage extra that you pay when you borrow money. d Annual Payment Rate. 25 What is a Fixed Interest Rate? a The lowest payment you can pay. b An interest rate that can change. c An extra charge for financial services. d This is an interest rate that will stay the same the whole time you have a loan. 26 What is a Variable Interest Rate? a This is an interest rate that can change while you have a loan. b The lowest payment due on a credit card. c An interest rate that stays the same. d The total amount of interest paid. 27 What is the Minimum Payment? a An interest rate that can change. b The total amount borrowed. c The highest amount you can borrow. d The lowest payment you can pay on your loan or credit card for the month. 28 What does Interest [APR] refer to? a An interest rate that stays the same. b The total amount of a loan. c The lowest payment due on a loan. d The percentage extra that you pay when you borrow money. 29 What is a Fixed Rate of Interest? a An interest rate that can change. b The lowest payment you can pay. c This is an interest rate that will stay the same the whole time you have a loan. d An extra charge for financial services. 30 What is a Variable Rate? a An interest rate that stays the same. b The total amount of interest paid. c This is an interest rate that can change while you have a loan. d The lowest payment due on a credit card. 31 What is a credit reporting agency? a A credit card issuer. b A type of loan provider. c A company that can give you your credit report. d A government organization. 32 What does the Truth in Lending Act of 1968 require? a Lenders to offer loans without interest. b Lenders to tell the truth about the terms of their loans. c Banks to provide free credit reports. d Borrowers to pay loans immediately. 33 What is predatory lending? a Offering loans with no interest. b Lending with unfairly high interest rates and charges. c Providing loans to everyone regardless of credit. d Lending only to wealthy individuals. 34 What does usury refer to? a Unfairly high interest rates. b Loan repayment terms. c Low interest rates. d Credit score calculations. 35 What is a lien? a A financial institution. b A credit score. c A type of loan. d A legal claim on someone else's property to secure debt repayment. 36 What does liquidation mean? a Buying real estate. b Investing in stocks. c Holding onto valuable items. d Selling assets quickly for cash. 37 What is identity theft? a Changing passwords frequently. b Losing a credit card. c When personal information is stolen for fraudulent use. d Sharing personal information online. 38 What is prepayment? a Using a credit card. b Borrowing money without interest. c Paying after using a service. d Paying for something ahead of time. 39 What does PIN stand for? a Personal Identification Number. b Payment Identification Number. c Public Information Network. d Private Investment Note.
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