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PF4: Credit vs. debt, 3 C's of credit, FICO score

Last updated about 6 years ago

5 questions

1

1

1

1

1

Question 1

1.

Which of the following is the LEAST important factor in determining a person's creditworthiness?

capacity to repay the loan

previous ownership of a home

whether the borrower has collateral

character (credit score)

Question 2

2.

Many financial advisors say that a fixed rate of interest is better than a variable rate. Why is this?

A fixed rate gives you constant, predictable payments.

A fixed rate builds your credit score more than a variable rate.

A fixed rate will always be lower than a variable rate.

A fixed rate is easier to refinance than a variable rate.

Question 3

3.

What's the difference between credit and debt?

Credit and debt are not related to each other

Debt must be extended before credit is assumed

Credit and debt are synonymous

Credit must be extended before debt is assumed

Question 4

4.

Which one of the 3 C's of credit is related to one's ability to repay a loan?

Capacity

Collateral

Capital

Character

Question 5

5.

Which of the following FICO scores would give a borrower the BEST chance of being approved for a loan while also paying the lowest APR?

550

800

715

620