Credit Vocab
Closed end credit.
Borrower repays a specified number of equal payments. Also called installment payments. Car loan is an example of this.
Credit Agencies
Businesses hired by lenders to pursue payments on debts not paid back according to contract terms
True
If an individual has never used or reported credit, they will have no credit history.
True
Taking out new credit cards lowers your credit score
20
The average age of the first time credit card holder.
$8,000
The average credit card debt of American households with credit cards.
Credit History
Record of the borrower's past loan and credit-related transactions
False
A late payment doesn't have much impact on your credit score.
Annual Fee
A yearly fee charged for having a credit card.
Open end credit.
Also called revolving credit. Borrower can purchase and repay and decide how much to pay. Credit cards are an example of this.
APR
Annual Percentage Rate -- Interest rate you pay on the balance on your credit card.
Foreclosure
Borrower fails to keep up with mortgage payments and the lender takes possession of the property
Race and Gender
Cannot be included on a credit report
CRA
Credit Reporting Agency (Credit Bureau)
True. (Use the Sample Credit Report to answer this)
John Q Consumer had a civil claim that he had to pay.
True (Use the Sample Credit Report to answer)
John Q Consumer has a $210 Car payment
Credit Reporting Agencies
Keep a record of a consumer's account history (credit history
False
Lenders can see where you went to the doctor and what services you received at the doctor when you apply for credit and they check your credit history.
Credit Score
Mathematical number created to help evaluate the risk with lending a consumer money
3
Number of inquiries for Mr. John Q. Consumer's credit report.
Lender
Person or organization who makes funds available for others to borrow
True
Public Record information is included in a credit report.
Inquiry
Request for an individual's credit report.
Borrower
Someone who receives something with the promise to return it or to repay what is borrowed
Equifax Experian TransUnion
Three biggest Credit Reporting Agencies.
lower
Too many inquiries will _________ your credit score.
Vantage Score and FICO
Two most common scoring models for credit score.
False
When a borrower repays a specified number of equal payments, it is called open end credit.
Bankruptcy
When an individual or business is not able to repay outstanding debts
Cash Advance
Withdrawing cash from an ATM using hour credit card
False
You should close old credit card accounts.
True
Your social security number and birthday are given to lenders when you apply for a loan and they check your credit history.
Over the limit fee
a fee charged when the account goes over the set credit limit.
Your housing costs
can be affected by your credit score.
A high credit score
can get you a lower interest rate.
Late payment fee
charged when the credit card holder doesn't make the minimum monthly payment due by the due date
Schumer box
easy to read box format of the fees and terms that is required to be on all credit card applications and offers.
Credit
goods, services, and/or money received in exchange for a promise to pay back a definite sum of money at a future date
Returned payment fee
may be charged if the cardholder makes a payment but doesn't have enough money in the account to cover the payment.
A higher credit score
means you are more likely to pay back a loan.
Balance Transfer
the act of transferring debt from one credit card to another.
Penalty APR
the interest rate charged on new purchases if the penalty terms of the credit card contract are triggered.
