Credit

A soft inquiry

This kind of credit inquiry has no effect on your credit score.

Installment accounts

Time payment plans, allow for payment over a period of time. Normally for large purchases. Sometimes requires a down payment.

Secured loans

Where the borrower pledges some asset.

An account you don't recognize on your credit report may mean.

You may be the victim of identity fraud.

Annual fee

A flat yearly charge similar to a membership fee.

A credit report

A history of how you pay back loans and credit cards

Unsecured loan

A loan that is given out based on only a customers credit worthiness/Credit Score.

Credit score

A number that shows a snapshot of your credit at a specific moment in time.

Michael noticed an inaccuracy in his credit report and he is interested in applying for a new credit card next month. Which action should he take?

He should ask one of the credit bureaus to issue a fraud alert.

Late payments

These entries on a credit report will decrease your credit score.

Regular charge accounts

Allow customers to charge purchases during a month and pay the balance in full within 30 days after being billed.

Budget accounts

Allow for payment of purchased item over a certain time without a finance charge.

Credit

Allows businesses or individuals to obtain products or money in exchange for a promise to pay later.

What is the importance of credit?

It is essential to our economy and allows people to buy expensive items

What is a long-term impacts of having a good credit history?

It's easier to pay for major purchases like cars, houses, and education.

What are the five sources of consumer credit?

Banks, Loans, Credit Unions, Finance companies, Life insurance

The best strategy for paying your credit card bill

Pay the entire balance every month.

How do lenders evaluate if a borrower or cosigner will pay them back?

Capacity, collateral, character

Special customer cards

Offered to frequent shoppers. They allow customers to receive on items purchased.

The best way to lower credit utilization to an acceptable level.

Decrease your credit card balance

Variable rate plans

Rates that are tied to other rates.

What are the four types of credit accounts extended to consumers?

Regular, Installment accounts, Revolving accounts, Budget accounts

Fair credit reporting act of 1971

Requires that a lender report the name address of the credit bureau that was used by the lender when a consumer is denied credit.

The truth lending act of 1968

Requires that lenders disclose info. about annual percentage rates.

Which type of card impacts your credit history?

Student credit card

Why would a borrower get a cosigner for a loan?

The borrower can't qualify for a loan by themselves

Finance charge

The dollar amount a customer pays to use credit.

Credit limit

The maximum amount that can be put on a credit card based on the customer's ability to pay it back.

Revolving account

The retailer determines the credit limit and when payments are due.