Credit 101
One disadvantage to credit cards
What is -Paying interest if balance is kept on card -Additional fees may apply if card is not used properly -Tempting to overspend -Responsible for lost/stolen cards -Risk of identity theft
Property that a borrower promises to give up in case of default.
What is collateral
A numerical measure of a loan applicant's creditworthiness at particular point in time.
What is a credit score
Plastic card that holds pre-approved credit.
What is a credit card
Having the assets, income, and tendency to repay debt.
What is creditworthy
One advantage to credit cards.
What is -Convenient -Useful for emergencies -Often required to hold a reservation -Purchase expensive items earlier -Possibility of receiving bonuses, such as frequent flyer miles and cash rebates
Allows the borrower to use a specific amount of money for an indefinite period of time.
What is open-end credit
Credit score is also known as
What is a FICO Score
A payment that must be paid every month
What is minimum payment
Age you must be to get a credit card
What is 18 years old
A loan that require collateral
What is secured loan
FICO Score Range
What is 300 to 850 850 Being the Highest and 300 Being the Lowest
When something is received in exchange for a promise to pay back money in the future
What is credit
A responsible person who signs the loan with the person whom the loan is granted.
What is a cosigner
Loan made on the strength of a signature alone.
What is unsecured loan
An organization that collects information about the financial credit transactions of consumers.
What is a credit reporting agency... or... What is a credit bureau
Interest rate charged on a credit card
What is Annual Percentage Rate (APR)
Only way to avoids interest on your credit card
What is Pay it off immediately (or end of payment period)
Type of credit for a specific amount that must be repaid with finance charges by a specified date.
What is closed-end credit.
Three things FICO scores are based on.
What is Payment History, Amount owed, Credit History, New Credit, Types of Credit Used.
The price of money
What is interest