Topic 6: Credit

Give a couple of characteristics that a person should look for when choosing a legitimate credit counseling agency.

Debt Management Plans are one of many services offered by upstanding credit counseling firms. What is an advantage of enrolling in a debt management plan?

A Debt Management Plan is not always the best options, give an example of why a DMP would not be the best plan of action.

Debt Settlement companies claim to negotiate settlement of debt for less than the amount owed, are these agencies typically non-profit or for-profit?

If debt settlement seems like a viable option for your client, they can usually settle debts on their own, with no need to go through a Debt Settlement Company. What other warning should we give a client who wishes to settle a debt?

Debt settlement companies provide instant debt relief, true or false?

Who can a client contact to find out if a debt relief company offering debt termination services is legitimate?

Your client is trying to raise her credit score to buy a home in the next year. She has an old inactive credit card with Macey’s and wonders if it would be wise to close it, since she doesn’t use it anyway, what is your advice?

Your client has decided to close an old delinquent credit card account. You have suggested that he request that it is considered “closed by consumer” and that it be a “hard close”. What is a “hard close” and why should he do this?

A client comes to you for advice. She is in need of a credit card to pay for business related expenses during business trips. These expenses will be reimbursed to her monthly, so paying the balance in full will not be an issue. She will likely be using an ATM often to make cash withdrawals for bus or taxi fare. When reviewing credit card offers, what should she consider?

Name one of the protections that the Credit CARD Act provides to consumers.

What is one thing to consider when contemplating a low rate balance transfer credit card offer?

Because you have more rights to dispute charges; it is a good idea to put a big purchase like a vacuum on a ______ card. (Debit or Credit)

If you lose a debit card, why is it important to report it promptly?

A client comes to see you because they applied for a loan and feel like the loan officer discriminated against them due to the fact that she receives SNAP benefits. The Equal Credit Opportunity Act and Fair Housing Act prohibit such discrimination, where can she go for assistance?

Give a couple of tips for wise credit card use.

To dispute a billing error on a credit card, you must do so in writing within how many days?

A client is interested in knowing how to dispute a charge on his credit card for unauthorized use, his little sister babysits his son often and he gives her is credit card to pay for dinner and entertainment, but last week she charged a tank of gas and some clothes at the mall. Can he dispute these charges?

Describe the difference between open-ended and close-ended credit and give an example of each.

A secured loan that give the borrower money to purchase a home, the most common type of home mortgage loan is called what?

What is the difference between a refinance loan and a home equity loan?

Reverse mortgages are secured loans that allow senior citizens who have equity in their home to draw down the equity and use it as income. What choices do they have to receive these funds?

List 3 of the required disclosures for installment loans.

Your client has over $5,000 in unpaid medical debt from a car accident 2 years ago, the collector encouraged him to refinance his house, and use the new loan to pay off the debt, is this a good idea, and why or why not?

What is the difference between a wage assignment and a wage garnishment?

What is the difference between Annual Percentage Rate (APR) and finance charge?

What kind of an interest rate fluctuates over time based on a benchmark interest rate or an index that changes periodically?