Personal Finance Test 2

5 C's

Character, Capacity, Capital, Collateral, Conditions

true

Credit cards are convenient when charging a hotel room or rental car

350-850

FICO scores generally range between

true

Interest on credit card is not tax deductible

less- decreases amount of money you have in the future

Trade off of using credit does it make more money available or less?

debit card

electronically subtracts money from saving or checking

60 days

if you are denied credit you can ask for a copy of your credit report within how many days

true

if you pay your balance IN FULL during the grace period you're getting a loan for free.

false

information gathered from a loan application establishes your credit rating

true

most information in your credit file may be reported for only 7 years

collateral

property pledged to back a loan

bankruptcy

remains on your credit file for at least 7-10 years

closed ended

specific purpose with specific amount

opened ended

store credit card--- open forever or until its closed on you.

true

the fair credit reporting act of '71 limits who can obtain your credit report

The temptation to overspend

the greatest disadvantage of using credit is

true

the higher your FICO score, the lower your risk to creditors

family

the least expensive loans you can borrow are from

true

the longer the loan, the more interest you pay

line of credit

the maximum amount of money the creditor has made available to you

home equity loan

used for major expenses like home improvements of education

FICO and Vantage

what are the 2 scores used by creditors

Zero

what is the finance charge during grace period