Question 1

If you receive a phone call that seeks to verify or update personal information,you should
A)ask several questions of the solicitor to verify his or her authenticity.
B)ask to speak to a supervisor.
C)obtain his or her name and address in case you need to contact him or her in the future.
D)never give out any personal information to someone you do not know.

Accepted Answer

It is never a good idea to give out personal information over the phone, especially if you are not sure who is on the other end of the line. Therefore, the best choice is to never give out any personal information to someone you do not know.

Question 2

Errors on credit reports can occur.If there is an error on your report
A)it is your responsibility to review it once a year for accuracy and inform of any errors.
B)it can result in the credit agency being charged under the Fair Credit Reporting Act.
C)the creditor reporting to the agency must correct it solely at your request.
D)you must inform the Better Business Bureau to take your case to the authorities.

Accepted Answer

It is important for individuals to regularly review their credit reports for accuracy and inform the credit reporting agencies of any errors. This is the most effective way to ensure that errors are corrected and does not involve charging the agency or involving external organizations like the Better Business Bureau.

Question 3

When do you need to use a credit repair service?
A)When you find an error on your credit report which is negatively affecting your score
B)At the point that you need to work with the trustee in bankruptcy to develop a consumer proposal
C)A credit repair company should be contacted only as a last resort to avoid bankruptcy.
D)Never,as they have no special powers to correct information on your credit report.

Accepted Answer

Credit repair services often claim they can fix your credit score by removing negative information from your report. However, they cannot do anything you can't do yourself for free. Errors on your credit report can be disputed by contacting the credit bureaus directly, and financial counseling for managing debt or avoiding bankruptcy can be sought through non-profit counseling services.

Question 4

Low credit scores may result in
A)lower interest rates for borrowing.
B)higher interest rates for borrowing.
C)automatic acceptance of your credit application.
D)targeting by credit companies.

Accepted Answer

Low credit scores indicate a higher risk for lenders, which leads to higher interest rates for borrowing. Lenders may also be more hesitant to approve credit applications from individuals with low credit scores. Additionally, credit companies may target individuals with low credit scores for credit repair or subprime lending offers.

Question 5

Revolving credit means
A)the loan balance will fluctuate based on the amount used.
B)the interest rate will revolve above the prime rate.
C)it is a credit card.
D)it is a mortgage.

Accepted Answer

Revolving credit is a type of credit where the borrower is given a maximum credit limit and can use and repay the credit as per their convenience. The loan balance will fluctuate based on the amount used, which is the defining characteristic of revolving credit. Options B, C, and D are incorrect as they do not accurately describe revolving credit.

Question 6

A poor credit history will appear on your credit report for
A)3 to 5 years.
B)3 to 10 years.
C)5 to 7 years.
D)7 to 10 years.

Accepted Answer

Negative information, such as late payments and collections, can remain on your credit report for up to 10 years.

Question 7

If a person obtains your credit card number by standing close enough to you to either see your credit card or hear you speak the number during a telephone call,he or she is
A)shoulder surfing.
B)pharming.
C)pretexting.
D)skimming.

Accepted Answer

Shoulder surfing is the practice of obtaining sensitive information (such as credit card numbers) by visually eavesdropping on someone else's actions or conversations. In this scenario, the person is standing close enough to see or hear the credit card number. Pharming is a type of online scam where a website is hijacked to redirect users to a different malicious website. Pretexting is a type of social engineering attack where an attacker pretends to be someone else in order to obtain sensitive information. Skimming involves using a device to steal credit card information from the magnetic strip.

Question 8

Which of the following statements is true regarding a review of your credit agency report?
A)You will not have authority to make corrections,as the information must come from a financial institution.
B)It will help determine if there are credit cards you should apply for to improve your credit standing.
C)It will reveal if you have sufficient income to carry additional debt.
D)It will reveal deficiencies that you can work on to improve your credit rating.

Accepted Answer

Reviewing your credit agency report will reveal any deficiencies, such as missed payments, that may be impacting your credit rating. This knowledge allows you to work on improving your credit standing. Choices A, B, and C are incorrect as they do not accurately reflect the purpose of reviewing a credit agency report.

Question 9

Manipulating email viruses and host files to redirect users from legitimate commercial websites to bogus websites to obtain log-in names and passwords is referred to as
A)pharming.
B)phishing.
C)skimming.
D)trolling.

Accepted Answer

This is known as pharming, which is a type of cyber attack that involves redirecting users from a legitimate commercial website to a fake or bogus website in order to steal their personal and financial information. The attackers achieve this by manipulating the host file on the user's computer or by using malware to modify the DNS server settings. Phishing, skimming, and trolling are also types of cyber attacks, but they involve different techniques and objectives.

Question 10

Which of the following can be used by a creditor in deciding whether or not to grant credit?
A)Credit history
B)Marital status
C)Gender
D)Any of the above

Accepted Answer

Credit history provides important information about an individual's past repayment behavior and is a reliable predictor of future creditworthiness. Marital status and gender are irrelevant factors in assessing creditworthiness and using them as a basis for granting credit is discriminatory and illegal.

Question 11

Identity thieves that obtain your information from the magnetic strip on your credit card are using a technique known as
A)pharming.
B)phishing.
C)pretexting.
D)skimming.

Accepted Answer

Skimming involves the use of a device to steal credit or debit card information from the magnetic strip, which can then be used to make unauthorized purchases or commit identity theft. Pharming and phishing involve fraudulent websites or emails designed to trick people into divulging their personal information, while pretexting involves using a false pretext or story to gain access to someone's personal information.

Question 12

Even though you may have a very high credit score,the loan approval
A)relies on a lower BEACON score.
B)relies on consistent scores from all credit reporting agencies.
C)relies on the lender's assessment of sufficient income.
D)relies on the impression you make with your lender.

Accepted Answer

While a good credit score is important, lenders also consider other factors such as income and debt-to-income ratio when deciding whether or not to approve a loan. A high credit score may not be enough if the lender does not believe that you have sufficient income to repay the loan.

Question 13

Credit insurance
A)is a free benefit on most credit cards.
B)can be used to pay off all debt when a creditor becomes unemployed.
C)is a good substitute for health and disability insurance.
D)can cover monthly credit repayments if a consumer cannot work.

Accepted Answer

Credit insurance can cover monthly credit repayments if a consumer cannot work due to job loss, disability, or death. It is not a substitute for health and disability insurance and is not always a free benefit on credit cards. Additionally, credit insurance only covers credit repayments, not all debt.

Question 14

The best policy regarding credit is
A)always go for the highest credit limit possible.
B)always make the minimum payment.
C)pay back debt using consistent payments every month.
D)take steps to increase your credit score.

Accepted Answer

The answer of The best policy regarding credit is
A)always go...

Question 15

Which of the following is true about credit bureaus in Canada?
A)There are two federally appointed credit bureaus in Canada.
B)It is impossible to have a better credit score at one bureau than another.
C)Lenders may access your credit information without your permission.
D)Lenders may use more than one credit bureau for information.

Accepted Answer

Lenders in Canada may use more than one credit bureau to access and gather information about an individual's credit history. This is important because different bureaus may have different information and scores, making it beneficial for lenders to look at multiple sources before making a credit decision. A and B are untrue as there are actually two main credit bureaus in Canada and it is possible to have different scores with each one. C is also false as lenders must have the individual's consent to access their credit information.

Question 16

A large number of recent credit inquiries suggests
A)you have a high BEACON score.
B)you are having trouble getting credit.
C)you have a good rating with many financial institutions.
D)you are very diligent in tracking your credit information.

Accepted Answer

A large number of recent credit inquiries suggests that you have been applying for credit frequently, which can potentially indicate financial difficulty or instability. It can also negatively impact your credit score.

Question 17

Using email messages from a supposedly legitimate source to obtain account information for the purpose of identity theft is referred to as
A)pharming.
B)phishing.
C)skimming.
D)trolling.

Accepted Answer

Phishing is the act of sending emails that appear to be from a legitimate source but are actually fraudulent. The aim is to trick the recipient into giving away sensitive information such as usernames, passwords, and credit card numbers. Pharming involves redirecting a legitimate website's traffic to a fake website. Skimming involves using a device to steal credit card information at a physical location, such as an ATM. Trolling refers to deliberately posting inflammatory comments online to provoke a reaction.

Question 18

Posing as an employee of a brokerage firm to obtain information to allegedly update your account information is an example of
A)phishing.
B)pharming.
C)pretexting.
D)skimming.

Accepted Answer

Pretexting is the act of posing as someone else to obtain private information. In this scenario, the individual is posing as an employee of a brokerage firm to gather information to allegedly update their account information.

Question 19

A credit bureau report may include
A)your account history.
B)your spouse's name.
C)a list of debtor contacts.
D)all of the above.

Accepted Answer

A credit bureau report typically includes your account history with various lenders and financial institutions. It may also include your credit score, but it generally does not include personal information such as your spouse's name or a list of debtor contacts.

Question 20

Which of the following is the most serious threat from identity theft?
A)Criminal activities attributed to the victim
B)The financial cost to society
C)Loss of access to credit
D)Credit card charges made by the perpetrator

Accepted Answer

Criminal activities attributed to the victim, such as fraudulent charges or illegal activities conducted under the victim's name, can lead to severe legal and financial consequences. The victim may be falsely accused of illegal activity or face difficulty clearing their name, which can be a long and expensive process.

Quiz 2: Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

If you receive a phone call that seeks to verify or update personal information,you should

Errors on credit reports can occur.If there is an error on your report

When do you need to use a credit repair service?

Low credit scores may result in

Revolving credit means

A poor credit history will appear on your credit report for

If a person obtains your credit card number by standing close enough to you to either see your credit card or hear you speak the number during a telephone call,he or she is

Which of the following statements is true regarding a review of your credit agency report?

Manipulating email viruses and host files to redirect users from legitimate commercial websites to bogus websites to obtain log-in names and passwords is referred to as

Which of the following can be used by a creditor in deciding whether or not to grant credit?

Identity thieves that obtain your information from the magnetic strip on your credit card are using a technique known as

Even though you may have a very high credit score,the loan approval

Credit insurance

The best policy regarding credit is

Which of the following is true about credit bureaus in Canada?

A large number of recent credit inquiries suggests

Using email messages from a supposedly legitimate source to obtain account information for the purpose of identity theft is referred to as

Posing as an employee of a brokerage firm to obtain information to allegedly update your account information is an example of

A credit bureau report may include

Which of the following is the most serious threat from identity theft?