Vocabulary
What does creditworthiness mean?
Creditworthiness is how well you handle your money. How trusted you are to repay borrowed money.
What is a credit report?
This describes your credit history and your financial responsibility.
What is a credit score also known as?
A FICO score (Fair Isaac Corporation). They introduced the original formula and score.
True or False: Having good credit means you are a low-risk borrower
True
True or False: Creating many new credit accounts will improve your credit score.
False
What is a service credit?
A service credit is an agreement to receive a service now and pay for it later.
What should you look for on your credit reports?
Any unfamiliar accounts, addresses, payments/transactions, report errors and inaccuracies and any information you do not recognize.
How do lenders use credit scores?
Lenders use this score to make decisions about your creditworthiness and the probability you will repay your debts.
2 Actions people can take to improve their credit score
Answers may vary. Pay bills on time, keep balances manageable, pay the minimum monthly payment, apply for new credit lines only when needed, do not apply for a lot of new accounts in a short period of time.
True or False: Once your credit score is calculated, there is nothing you can do to change it.
False!!
What is a credit limit?
Credit limit is the highest amount of money that can be charged on your credit card account.
Why might a person have 3 different credit scores?
Each of the 3 agencies use a different formula scoring model and some businesses may not report information to all 3.
What is one thing that can lower your credit score and what is one thing that can raise your credit score?
What are 3 advantages of having credit?
Convenience, Purchasing power, safety, purchase protection, rewards, building credit, Emergency funds
What are 3 disadvantages of having credit?
Overspending, interest and fees, debt, fraud, penalties, convenience
What is revolving credit?
Revolving credit is a type of credit that can be used repeatedly with the option of paying the balance in full or making monthly payments. EX: credit cards
What are the four sections of a credit report?
Personal Information, Credit History, Public Records, and Credit Inquiries
What are two things that can happen if your credit score is not good?
What is a "teaser rate" and why would a credit card company use this?
It is an introductory rate and they are used to attract new customers.
What are 4 different things you should look at when deciding what credit card to get?
interest rates, fees, APR, rewards/cash back, minimum payments. Other answers may vary
What is the difference between open-end credit and closed-end credit?
Closed-end credit is a loan for a specific amount of money that must be repaid in a specified time period. Once fully paid, it is closed. Open-end Credit allows customers to make repeated purchases with the option of paying it and remains open and ready to be used again.
Give 3 ways that you can protect yourself from credit fraud.
Monitor your statements, Keep your information secure, be aware of scams, use secure websites, other answers may vary
What are the 5 main categories of a person's credit score?
Payment history, Total Amount Owed, Length of Credit History, Credit Inquiries and Types of Credit
EXPLAIN how a person's credit can affect different aspects of their life.
A person's credit can affect you when applying for jobs, apartments, houses, credit cards, loans and even car insurance. It may cause you to pay higher rates or having a lower credit limit. Other answers may be accepted.
Answer these three questions (Must get all) :
1.) Ms. Wittmeyer's favorite Ice Cream
2.) Ms. Wittmeyer's favorite color
3.) Where do I want to travel to?
You may wager as many points as you want to.
1.) Chocolate Peanut Butter Fudge
2.) Blue
3.) Bora Bora