FiCEP Fundamentals 3

Question 1

Which credit score range is generally considered 'good' by FICO scoring models?

Accepted Answer

670–739

Answer

FICO scores between 670 and 739 are classified as 'good,' enabling access to competitive loan products.

Question 2

A client has multiple high-interest credit card balances. Which debt repayment strategy saves the most money in interest?

Accepted Answer

Avalanche method

Answer

The avalanche method targets the highest-interest debt first, minimizing total interest paid over time.

Question 3

What is the statute of limitations on debt primarily used for in financial counseling?

Accepted Answer

It sets the time period a creditor can sue to collect a debt

Answer

The statute of limitations is the legal window during which a creditor can file a lawsuit to collect a debt.

Question 4

Under the Fair Debt Collection Practices Act (FDCPA), which action is prohibited for third-party debt collectors?

Accepted Answer

Calling a debtor before 8 a.m. or after 9 p.m.

Answer

The FDCPA prohibits collectors from contacting consumers outside the hours of 8 a.m. to 9 p.m. local time.

Question 5

Which of the following is an example of an asset on a personal balance sheet?

Accepted Answer

Retirement account balance

Answer

A retirement account balance represents something of value owned by the client and is classified as an asset.

FiCEP - Financial Counseling Certification Program Practice Test