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.