ch. 4 & 5 test

Question 1

Factors used to determine a FICO score

Answer 1

Debt History, Debt levels, New debt, Type of Debt, Duration of debt

Question 2

Ideas to get out of debt

Answer 2

Quit borrowing more money
You must save money
Sell something
Part time job or overtime
Debt snowball

Question 3

Most cost efficient option for buying home

Answer 3

At least 10% down payment (preferably 20%)

15-year fixed rate loan

Question 4

Paycheck Garnishment

Answer 4

a court issues an order requiring your employer to withhold a certain amount of your paycheck and send it directly to the person or institution to whom you owe money, until your debt is paid off.

Question 5

3 main credit Bureaus

Answer 5

Experian
TransUnion
Equifax

Question 6

How often should you obtain a free copy of your credit report

Answer 6

3 times a year

Question 7

Upside down

Answer 7

A mortgage in which the amount that a property owner owes on the loan is more than that property’s current market value

Question 8

ARM

Answer 8

loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.