FiCEP Test Questions and Correct Solutions | Graded A+

Right Side of the Brain - This side of the brain processes creativity, patterns, spatial awareness, context Financial Planning - Helps members make the most of their incomes to accomplish long term goals, including saving and investing for retirement Debt Counseling - Helps members learn possible ways to structure their debt. Credit Counseling - Helps members manage spending in a way that rebuilds their credit and makes it possible to achieve financial goals. Budget Counseling - Used to determine how earnings will be allocated and makes it possible to restrain from spending so that money is available to meet living expenses, repay debt and meet other short-term and long-term goals. "Mom and Dad" syndrome - A continual reliance on parents to provide credit or money through cosigning loans, making a gift, or even making payments for them. Affluenza - The condition where people have more than they need and feel they still deserve more. Binary decision making - Compares two elements: the "absolutes" with the "nice-to-haves" Reframing - Involves putting a new frame around a life event to help the member see it in a different way. Scaling - Rating systems individuals use to assign a numerical rank to their needs, goals, or their level of motivation. This can help determine the value of specific action or goal, as well as it's priority in their plans for spending, saving, and debt. Blending - To display communication patterns that match those of the member, such as the rate of speech, tonality, vocabulary, and individual patterns of expressions. Pacing - To create a feeling of connection with the member by matching physical characteristics, such as their general posture, their general energy level, and even unconscious movements such as blinking or breathing. Debt Ratios - Compare total debt to annual income to show whether a member can afford new debt. Public Record Information - Includes bankruptcies, foreclosures, tax liens, and judgments. Capacity - How much debt an individual can realistically repay based on current income and expenses. Net Worth - Reflects the equity position of a member. The total assets less total liabilities. Credit Scores - Used to predict the member's ability to repay debt or pay bills. Credit Reports - Cash Flow - Shows how income and expenses are balanced during a specific period. What are the three types of counseling? - Remedial, preventive and productive. Productive Counseling - Helps members identify the best way to use their resources to improve their financial status. Preventive Counseling - Helps members with good financial habits manage financial challenges due to life changes, such as job loss, the birth of a baby, divorce or widowhood. Remedial Counseling - Helps members cope with financial problems created by overspending, debt they can't afford, or poor money management. Identification and Employment information - Includes name, birth date, social security number, employer, and spouse's name Credit Report Contents - 1. Identification and employment information2. Public record information3. Payment history4. Inquiries Under the FCRA (Fair Credit Reporting Act) what must credit bureaus comply with? - 1. Remove inaccurate information from files.2. Use appropriate procedures in gathering maintaining, and disseminating information.3. Limit how long creditors have to report negative information.4. Allow consumers to obtain free copies of their credit report once a year. The Fair Credit Reporting Act (FCRA) - Protects consumers by promoting fairness, accuracy, and privacy in credit reports. Credit Score - A statistical number that reflects the member's ability to pay for services or repay loans, based on values assigned to elements of the credit report. The higher the number, the better the borrower. (FICO) Credit Rating - An evaluation of an individual's ability to pay for services or repay loans. This evaluation is based on the credit score along with the elements of debt capacity, character, credit history, and collateral. Creditworthiness - An individual's capacity to borrow. Credit Bureau - Private, for-profit credit reporting companies that gather and sell information about an individual's credit history. Collateral - An item that can be taken and sold by the lender if the borrower fails to pay as agreed. (Typically a vehicle or real estate) Credit History - Determined by existing credit relationships. Factors may include collection activity, credit card accounts, judgments, bank loans and mortgages.