Fundamentals Flashcards
7 cards from real FICEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fundamentals flashcards as text
Which credit score range is generally considered 'good' by FICO scoring models?
Answer: 670–739
FICO scores between 670 and 739 are classified as 'good,' enabling access to competitive loan products.
A client has multiple high-interest credit card balances. Which debt repayment strategy saves the most money in interest?
Answer: Avalanche method
The avalanche method targets the highest-interest debt first, minimizing total interest paid over time.
What is the statute of limitations on debt primarily used for in financial counseling?
Answer: It sets the time period a creditor can sue to collect a debt
The statute of limitations is the legal window during which a creditor can file a lawsuit to collect a debt.
Under the Fair Debt Collection Practices Act (FDCPA), which action is prohibited for third-party debt collectors?
Answer: Calling a debtor before 8 a.m. or after 9 p.m.
The FDCPA prohibits collectors from contacting consumers outside the hours of 8 a.m. to 9 p.m. local time.
Which of the following is an example of an asset on a personal balance sheet?
Answer: Retirement account balance
A retirement account balance represents something of value owned by the client and is classified as an asset.
What does 'net worth' measure in personal financial planning?
Answer: Total assets minus total liabilities
Net worth equals total assets minus total liabilities and represents the overall financial position of an individual.
Which behavior is most closely associated with financial self-efficacy in a counseling context?
Answer: Believing one can successfully manage financial challenges
Financial self-efficacy is the belief in one's own ability to manage money effectively and achieve financial goals.