Chapter 14 Flashcards
In regards to credit reports, what percentage (%) does ‘Payment History’ reflect upon your score?
Select one:
a. 25%
b. 15%
c. 10%
d. 35%
Correct Answer: 35%
Rationale: 35%: Your Payment History reflects 35% of your overall credit score.
Relevant section(s) of the textbook: 14.3 Credit Scores and Analysis
The correct answer is: 35%
An example of this type of account would be a car loan, personal loan, etc.:
Select one:
a. Line of Credit
b. Installment account
c. Revolving or option account
d. Air Loans
Correct Answer: Installment account
Rationale: Installment account: An example of this would be a car loan, personal loan, etc. This type of credit has equal payments that will eventually fully repay the loan. Unlike a credit card when the borrower makes a payment that amount is not available to be re-borrowed.
Relevant section(s) of the textbook: 14.2 Credit Reports
The correct answer is: Installment account
This term refers to a loan where the debtor has given personal property as collateral and the loan is registered with the provincial government:
Select one:
a. Third-party Collections
b. Judgements
c. Bankruptcies
d. Secured Loan
Correct Answer: Secured Loan
Rationale: Secured Loans: A chattel mortgage, registered loan, or registered lien is a loan where the debtor has given personal property as collateral and the loan is registered with the provincial government.
Relevant section(s) of the textbook: 14.2 Credit Reports
The correct answer is: Secured Loan
How long does a bankruptcy remain on a credit report once discharged?
Select one:
a. 6 or 7 years, depending on the bureau
b. 6 years
c. 5 years
d. 7 years
Correct Answer: 6 or 7 years, depending on the bureau
Rationale: Credit Score: 6 years for Equifax and 7 years for TransUnion
Relevant section(s) of the textbook: 14.3 Credit Scores and Analysis
The correct answer is: 6 or 7 years, depending on the bureau
This term refers to a numerical representation of an individual’s credit:
Select one:
a. Empirica Score
b. Credit Score
c. Credit Report
d. Judgements
Correct Answer: Credit Score
Rationale: Credit Score: A numerical representation of an individual’s credit.
Relevant section(s) of the textbook: 14.3 Credit Scores and Analysis
The correct answer is: Credit Score
In regards to credit reports, what percentage (%) does ‘Inquiries’ reflect upon your score?
Select one:
a. 15%
b. 35%
c. 25%
d. 10%
Correct Answer: 10%
Rationale: 10%: Inquiries represent 10% of your overall credit score.
Relevant section(s) of the textbook: 14.5.1 Understanding a Credit Score
The correct answer is: 10%
An example of this type of account would be a credit card such as a Visa, Mastercard, department store card, etc.:
Select one:
a. Air Loans
b. Installment account
c. Revolving or option account
d. Line of Credit
Correct Answer: Revolving or option account
Rationale: Revolving or option account: An example of this would be a credit card such as a Visa, Mastercard, department store card, etc. The word revolving refers to the fact that as the borrower makes a payment, that amount is again available as part of the credit limit.
Relevant section(s) of the textbook: 14.2 Credit Reports
The correct answer is: Revolving or option account
This term refers to a court order against a debtor for payment of monies owing:
Select one:
a. Third-party Collections
b. Bankruptcies
c. Secured Loans
d. Judgement
Correct Answer: Judgement
Rationale: Judgements: A court order against a debtor for payment of monies owing (date judgment granted or date filed; judgment status [ST JD - satisfied judgment, JD GT - judgment]; court identification number/name of court; amount of judgment; defendant; judgment number; plaintiff; status of judgment [satisfied, unsatisfied or disposition unknown] and date, when applicable).
Relevant section(s) of the textbook: 14.2 Credit Reports
The correct answer is: Judgement
The Bank Nav Index stands for:
Select one:
a. Bankruptcy Navigation Index
b. Bank Navigator Index
c. Bankruptcy Navigator Index
d. Banking Nav Index
Correct Answer: Bankruptcy Navigator Index
Rationale: The Bank. Nav. Index, short for the Bankruptcy Navigator Index, is a proprietary scoring model used by Equifax to predict the likelihood of a consumer becoming bankrupt within the next 24 months. It includes the characteristics of the credit file that are predictive of bankruptcies and BNI identifies those consumers who are in acute financial difficulty but not missing payments.
Relevant section(s) of the textbook: 14.3 Credit Scores and Analysis
The correct answer is: Bankruptcy Navigator Index
This term refers to a person legally declared to be unable to pay debts:
Select one:
a. Judgements
b. Third-party Collections
c. Bankruptcies
d. Secured Loans
Correct Answer: Bankrupt
Rationale: Bankruptcies: A person legally declared to be unable to pay debts (date filed, type of action, [IND for personal; BUS for business], court name, court code, liability, assets, filer [subject, spouse or both], case number and trustee, disposition of bankruptcy and description of the bankruptcy).
Relevant section(s) of the textbook: 14.2 Credit Reports
The correct answer is: Bankruptcies
