Sources of Credit Reports/Assessment

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Globe for WikiEducator.jpg Unit 3.1- Sources of Credit Reports 

Introduction | Components | Purpose | Direct Sources | Other Sources | Indirect Sources | Summary | Resources | Activities | Assessment


1. Which of the following is a definition of a credit report?

a. An instrument that will provide ease in obtaining bank financing
b. A required report by most government agencies
c. A tool to assist a seller in assessing payment potential of a customer
d. A report that is the best source to view financial information of a potential customer

2. The concept of a credit report includes

a. meeting legal requirements of a business license.
b. providing a way in which a business can solidify a bank line of credit.
c. providing a debtor the means to outline his/her business principles.
d. offering an opportunity for a creditor to review key information to make an informed decision.

3. The main purpose of a credit report is to

a. establish a method for customers to obtain favorable payment terms.
b. clarify the credit rating of a potential customer.
c. allow a business to select qualified vendors.
d. clarify financial rumors about a company.

4. Which of the following is an example of a direct method of credit investigation?

a. National Association of Credit Manager (NACM)
b. Customer financial reports
c. Experian credit report
d. Industry trade groups

5. Which of the following is an example of an indirect method of credit investigation?

a. Wall Street Journal
b. International bank records
c. Dun & Bradstreet credit report
d. customer financial reports

(Correct answers: 1=c, 2=d, 3=a, 4=b, 5=c.)