what is credit
what is credit?
an agreement between two parties in which one party lends money to another party.
what is closed-end credit?
a loan-specific amount that must be repaid with interest by a specific date
true or false you want a high credit score
true
what is a proprietary credit card?
a card that can only be used in the stores of the company that issued it
what are the five Cs of banking?
cash flow
capacity
capital
collateral
conditions
what is a creditor?
party extending the credit
what is secured credit?
Credit loans that require collateral
what is the simple interest formula?
principal x rate x time = interest
what is credit policy?
a written set of guidelines used by an organization to determine how many and which customers will be approved for credit
what is a business loan?
money borrowed by a bank for a specific purpose
true or false a creditor receives the credit
False
true or false open-ended credit is credit granted based on a signed credit agreement
false
what is APR?
its the annual cost of credit charged by a lender
what are the 3 Cs of credit?
character
capasity
capital
true or false credit is one of the 5 Cs of banking
false
what is trade credit?
a business granting a line of credit to another business for a short period of time to purchase its goods and services
what does principal mean?
amount of money borrowed
APR hides what from the borrowers
fees and charges
true or false a credit score is a numerical measure of a loan applicants creditworthiness
true
can you extend credit from business to business?
yes, its called trade credit
what benefits does credit provide?
ability to use goods and services as they are being paid
paid back with regular installments is?
installment loan
Apr is higher when?
the larger the finance charges
one credit card that can only be used in the stores of the company
proprietary credit card
what other words are for trade credit?
supplier financing
vendor financing