### What is the primary function of a credit repository? - [x] To maintain credit records and financial information about consumers - [ ] To issue credit cards - [ ] To provide loan guarantees - [ ] To offer financial advisory services > **Explanation:** The primary function of a credit repository, or credit bureau, is to maintain credit records and financial information about consumers. This includes payment records, credit balances, and other relevant aspects of one's financial history. ### Which of the following is NOT one of the three major credit bureaus in the United States? - [ ] Experian - [x] FICO - [ ] Equifax - [ ] Transunion > **Explanation:** Experian, Equifax, and Transunion are the three major credit bureaus in the United States. FICO, on the other hand, is a company that provides credit scoring models and is not a credit bureau. ### What type of information do credit repositories maintain? - [ ] Current employment status only - [x] Credit balances, payment records, social security information, previous addresses, and employment history - [ ] Criminal records - [ ] Educational background > **Explanation:** Credit repositories maintain comprehensive information about consumers' financial histories, including credit balances, payment records, social security information, previous addresses, and employment history. ### Why might a consumer with a higher credit score benefit more in the credit market? - [ ] They are considered risky borrowers - [ ] They can get credit insurance more easily - [x] They can seek larger loans, get lower interest rates, and enjoy other promotional benefits - [ ] They can bypass credit checks for loans > **Explanation:** A higher credit score indicates lower credit risk, making a consumer more attractive to potential creditors. This can result in the ability to seek larger loans, obtain lower interest rates, and avail of other promotional benefits. ### Which of the following best describes the credit score assigned by credit bureaus? - [x] An indicator of credit risk - [ ] A measure of disposable income - [ ] An assessment of criminal history - [ ] An indicator of academic performance > **Explanation:** The credit score assigned by credit bureaus is an indicator of credit risk. It helps potential creditors determine how likely it is that a consumer will repay their debts. ### How can a high credit score affect consumer loans and credit cards? - [ ] High credit scores lead to immediate loan dismissal - [x] High credit scores can lead to lower interest rates and better loan terms - [ ] High credit scores automatically cancel existing debts - [ ] High credit scores prevent consumers from obtaining new credit cards > **Explanation:** High credit scores can result in lower interest rates and better loan terms for consumer loans and credit cards, as they indicate a lower risk to creditors. ### What other items in one's financial history are maintained by credit repositories? - [ ] Family history and medical records - [ ] Leisure activities and hobbies - [x] Employment history and previous addresses - [ ] Membership in organizations and clubs > **Explanation:** Credit repositories maintain items in one's financial history such as employment history and previous addresses, in addition to credit-related records. ### What is one main benefit of Experian, Equifax, and Transunion maintaining financial histories? - [ ] Ensuring uniform economic distribution - [x] Providing comprehensive credit reports that help lenders assess creditworthiness - [ ] Mandating equal access to all credit opportunities - [ ] Regulating interest rates for financial institutions > **Explanation:** Experian, Equifax, and Transunion maintain comprehensive financial histories to help lenders assess consumer creditworthiness through detailed credit reports. ### Can consumers access their credit information maintained by credit repositories? - [x] Yes, consumers have the right to obtain a copy of their credit report - [ ] No, only lenders can access this information - [ ] Yes, but only after 10 years - [ ] No, credit repositories are private and confidential > **Explanation:** Consumers have the right to access their credit information and can obtain a copy of their credit report from each major credit bureau. ### What might be the result of inaccuracies in the credit information maintained by credit repositories? - [x] Potential for higher interest rates, loan denial, and reduced creditworthiness - [ ] Guaranteed loan approval - [ ] Automatic debt forgiveness - [ ] Enhanced credit scores regardless of credit history > **Explanation:** Inaccurate credit information can lead to higher interest rates, loan denials, and reduced creditworthiness, affecting a consumer's ability to access credit or favorable loan terms.