Ch. 18 Study Guide - Consumer Credit

The amount of debt you have (Which C?)

Capacity

Your ability to pay your bills on time (Which C?)

Capacity

Your current salary (Which C?)

Capacity

The amount of money you have in savings (Which C?)

Capital

The value of other assets you own (Which C?)

Capital

The value of your home (Which C?)

Capital

Your checking account balance (Which C?)

Capital

Employment history (Which C?)

Character

Your credit record (Which C?)

Character

Your reputation for honesty (Which C?)

Character

Places the burden of proof for accurate credit information on the credit reporting agency

Consumer Credit Reporting Reform Act

Prohibits creditors from denying credit based on age, race, sex, or marital status

Equal Credit Opportunity Act

A credit counselor is employed by a collection agency.

FALSE

The 3 Cs of credit are character, capacity, and creditworthiness.

FALSE

The annual percentage rate states the percentage cost of credit per month.

FALSE

The date on which a loan must be repaid is known as the final payment due.

FALSE

Allows you to withhold payment due on defective merchandise purchased with a credit card

Fair Credit Billing Act

Gives consumers the right to know what information credit bureaus are providing about them.

Fair Credit Reporting Act

Requires that debt collectors treat you fairly and bans certain debt collection actions

Fair Debt Collections Act

A credit bureau gathers and reports information on credit users.

TRUE

A down payment is a partial payment made at the time of the purchase.

TRUE

Property that is used as security for a loan is called collateral.

TRUE

The legal process of reducing or eliminating money owed is bankruptcy.

TRUE

Protects consumers against unauthorized use of credit cards

Truth-in-Lending Law of 1968

Requires lenders to clearly state the annual percentage rate and total finance charges

Truth-in-Lending Law of 1968