Review Worksheet Module 2: Borrowing NAME: Multiple Choice: Read each item carefully; then select the best answer. 1. Which is not a type of credit? a. Car loan b. Car registration c. Phone service d. Credit card 2. Madeline is comparing her options to borrow $5,000 to buy inventory and equipment for her new sub sandwich shop. Which loan appears to be the best deal? a. 7 percent interest loan due in two years b. 8 percent interest loan due in 18 months c. 10 percent interest loan due in one year 3. Suki will soon turn 18 and wants to move into her own apartment in a few years. But she is worried that she won’t be able to rent an apartment without any credit history. What can Suki do to start building a good credit history? a. Rent an apartment with a friend who already has signed a lease. b. Continue to use her debit card responsibly, being careful to not overdraw on the account. c. Close her checking account to avoid bouncing a check. d. Get and use a store credit card or major credit card and pay off amounts due each month. 4. Who is responsible for reporting identity fraud? a. The victim of fraud b. The company that accepted a stolen credit card or false information c. Any of the three credit reporting agencies d. The police Review Worksheet Module 2: Borrowing Short Answer: Read each item carefully; then write an answer based on what you learned about using and managing credit. 5. Imagine you are comparing loans to buy a car. List at least three things you should compare to help you determine if which loan is right for your situation. a. b. c. 6. List at least three pieces of personal information you should be prepared to provide to a lender when you apply for a credit card or car loan. a. b. c. 7. List three strategies you can apply as you turn 18 to build a good credit history. a. b. c. 8. What can you do to deter someone from using your personal information to avoid becoming a victim of identity theft? a. b. c. Review Worksheet Module 2: Borrowing True/False: Read each statement carefully. Show whether the statement is True (T) or False (F) by writing either “T” or “F” in the blank space. 9. Using a debit card for purchases is a convenient way to buy now and pay later. 10. The maximum amount you can charge on a credit card is called the capacity. 11. Under the Fair Debt Collection Act, creditors are allowed charge a new debt collection fee without informing the borrower notice. Matching: Read each statement carefully. Select the term that best matches the statement by writing the letter of the matching term in the blank. A. APR 12. The total amount of money you owe other people. 13. A period of time before interest starts accumulating on charged purchases. B. Capital C. Collateral D. Contract E. Credit 14. What you pay to use another person’s money. 15. A reference of how you have used credit in the past. 16. Something of value that lenders can repossess if you are unable or unwilling to repay a loan as promised. 17. A way for you to buy something now and pay for it later. F. Credit Report G. Credit Score H. Debt I. Garnish J. Grace Period K. Interest

Credit Test

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