1.1
What income is to be included in budget?
-Regular Salary
-Temporary Jobs
-Unemployment Compensation
-Public Assistance
What is a credit score?
A numerical interpretation of a consumers creditworthiness
Name 3 of the "service" fees a bank may charge.
- Account maintenance fee
- Wire transfer fee
- Check purchasing fee
- Money order/cashiers check fee
What is a means test?
Bankruptcy qualification that considers income and equity in assets to determine if a client has the ability to repay part of the debt, when applying for chapter 7 bankruptcy.
What is FCRA and what 3 main rights does it protect?
Fair Credit Reporting Act
- What's in your file
- Dispute incomplete or inaccurate information
- Access to your file is limited
Name an item not to be included in budget.
Pre-tax payroll deductions
Where is the employment information located on a credit report?
The personal information section
What should an emergency fund consist of?
3 to 6 months of expenses
What are alternatives to filing bankruptcy?
1. Making adjustments to your household budget.
2. Ask for a loan modification.
3. Consider debt management.
4. Negotiate with lenders.
What is FACTA and the 3 main rights it protects?
Fair and Accurate Credit Transactions Act
- Free annual credit report
- Right to place a fraud alert on your credit file
- Credit card numbers must be truncated on receipts
What are some income documents used to create budget?
- Paychecks - Direct deposit slips - If self employed, income and expenses sheet - Additional income checks or cash -Government benefit letters
List the 5 main factors of a credit score.
- Payment history
- Capacity used
- Length of credit history
- Type of credit used
- New credit
What is one example of ideal emergency fund savings account?
- Interest bearing savings
- Money market
List 3 of the 6 common predatory lending tactics.
1. Limited Time Offers.
2. High-Risk Loans.
3. Higher Loan Amounts than wanted or needed.
4. High Fees or Costs.
5. False or Hidden Disclosures.
6. Loan Flipping.
What is the FCBA and what are the 2 main rights it protects?
Fair Credit Billing Act
- You can dispute errors associated with your credit card account
- You must be billed in a timely manner
List an expense to include in budget.
- All bills - All fixed monthly expenses - All cash expenses - Seasonal or annual expenses
List the 5 components of a credit report.
- Personal information
- Account/trade line information
- Public records
- Inquiries
- Consumer rights
What is an EITC?
Earned Income Tax Credit
When identity theft occurs, what 3 things should you do?
- Place a fraud alert with the credit reporting agencies
- Order credit reports from the credit reporting agencies to review and identify inaccuracies
- Create an identity theft report, which involves obtaining an identity theft affidavit from the FTC and filing a police report
What is one account type good for holding your large purchase savings?
- High interest savings account
- Money Market
- CD
What are some documents to use to track expenses?
- Utility, insurance, and other bills - Bank statements - Credit card statements - Records about car registration or school supplies
What is a large purchase savings fund used for?
- Birthday presents
- Children's school expenses
- A family computer
What are 2 of the 5 possible effects bankruptcy will have on the client?
1. Significantly lowering credit scores.
2. Consumers will typically only qualify for more expensive loan options.
3. Could impact a potential job offer if credit checked.
4. A landlord might think you are too risky to rent to or require additional financial information for consideration.
5. Insurance companies may charge higher premiums and banks may require additional deposits for accounts.
What are the 5 components of a credit score with the correlating percentage?
1. Account history - 35%
2. Amounts owed - 30%
3. Length of history - 15%
4. New credit - 10%
5. Types of credit - 10%