Unit 3: Using Credit Financial Literacy Aeseducation
An account that allows you easy access to your money and allows the use of checks and debit cards
checking
A secured loan is backed by ________________.
collateral or something of value, posted by borrower.
What is a Credit Card?
A card issued by a bank or business, allowing borrowers to purchase goods and services on credit.
What is a Credit Score?
A number that represents risk a lender takes on a borrower
A ____________ allows you to invest your money with a set interest rate for a pre-set period of time.
Certificate of Deposit
Who determines consumer credit scores?
Credit Bureaus
3 Major Credit Bureaus
Equifax, Transunion, and Experian
True or False? The three major credit bureaus are Equifax, TransSiberian, and Experion.
False
How does a high credit score impact a borrower's interest rate, monthly payment, and total price paid for the item?
Lowers them
What type of loan is a credit card?
Open Ended
Credit allows you to?
Purchase an item right now and pay for it later
What is the definition of a "want"?
Something you would like to have.
What is Interest?
The fee that is paid to borrow money.
What is principal?
The non-interest portion of a loan.
What is an Interest Rate?
The rate the lenders will charge if you use their money.
True or False? Consumer credit can help a lender determine how much a borrower is charged to borrow money.
True
Does the number of credit accounts a consumer holds affect their credit score? Yes or No
Yes
When budgeting, large expenses should be _________.
divided equally between paychecks
A budget is an estimate of income for a set period of time.
false
If a consumer DOES NOT have any collection accounts, does that have a negative impact on their score?
no
What is Amortization?
paying off debt with a fixed repayment schedule in regular installments over a period of time.
Jimmy has poor credit, but would like to repair it with credit card. What type of card should Jimmy apply for?
secured
True or False? Social media can influence consumer spending?
true
Is debt-to-income a factor when a lender is assessing whether to loan a borrower money?
yes