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CSR 342 Final Exam Questions With Actual Responses
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CSR 342 Final Exam Questions With Actual Responses
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CSR 342 Final Exam Questions WithActual Responses
The economic purpose of credit CORRECT ANSWERS To move consumption from the
future to the present, offers the American dream (home ownership, cars, student loans,
etc)
General rules of thumb for credit use CORRECT ANSWERS credit should not be used
for extending your lifestyle
the products purchased should outlive the credit card payments
pay your bills on time to avoid adverse affects
The household debt paradox CORRECT ANSWERS Households tend to carry high-
interest credit card debt while simultaneously holding liquid assets in low-interest
accounts, such as savings accounts.
Credit Scores CORRECT ANSWERS Credit scoring system awards points for each
factor that helps predict who is most likely to repay a debt.
Credit score factors that influence CORRECT ANSWERS bill paying history
length of bill payment
amounts owed
new credit lines
types of credit.
Range of possible scores of FICO CORRECT ANSWERS 300 to 850
Median is 723
Fair, Isaacs, and Company pioneer the credit scoring system
Name the three credit bureaus. CORRECT ANSWERS TransUnion, Experian, Equifax
Sections of a credit report CORRECT ANSWERS Indentifying Information
Public Records
Inquiries
, Credit History
Soft vs Hard "hits" on credit score CORRECT ANSWERS "Hard" Inquiries are those you
initiate by filling out a credit application or by taking your child to the doctor, "Soft"
Inquiries show up when companies want to send you a prequalified promotion or when
current creditors are merely monitoring your account
Types of loans and their advantages and Secured (collateralized) Unsecured loans
CORRECT ANSWERS conventional loans = low interest rates, unsecured loans = high
interest rates (credit cards)
Ways to pay back credit card debt CORRECT ANSWERS lock your cards away
budget & figure out where you stand
pay more than the minimum
move balance to lower interest cards
cash out savings accounts
borrow against your life insurance
get a home equity loan
borrow from your 401(k
renegotiate the terms of your loan with your creditors, add pertinent info to your credit
file, if all else fails file for bankruptcy
Consumer Credit Counseling Services Bankruptcy CORRECT ANSWERS absolute last
result is bankruptcy, your credit record will retain this info for 10 years. Chapter 7
bankruptcy relieves you of the responsibility of repaying most of your creditors, chapter
13 is the wage-earner plan. You keep your property but surrender the control of your
finances to the bankruptcy court
Credit Card and Debit Card Liabilities CORRECT ANSWERS Debit cards withdraw
money directly from your checking account and do not always offer the same
conveniences, services, and protection as conventional credit cards.
If your debit or credit card is stolen and reported
< 2 days: max liability for each is $50,
30-60 Days: debit liability is $500 credit is $50,
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