Credit Scores & Such
What is a credit score.
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What is a loan?
A sum of money borrowed that is expected to be paid back with interest.
What is a Thin File?
A thin credit file is one that doesn't have enough current information to calculate a credit score.
What is secured credit?
A secured card is backed by a cash deposit you make upfront; the deposit amount is usually the same as your credit limit.
what is character?
Credit history and personal background, honesty and reliability of the borrower to pay credit debts
What is the typical range of a credit score?
The typical credit score ranges between 300-900.
What is the most popular loans people apply for?
Home, Auto, Student, Business & Personal
Why is having a "thin file" bad?
When you make an application with a bank or another business, they're going to consider two major factors: your credit history and your income. If you have a thin file, you can get denied for a loan or purchase.
What is a Credit Builder Loan?
The money you borrow is held by the lender in an account and not released to you until the loan is repaid. It’s a forced savings program of sorts, and your payments are reported to credit bureaus.
What is Capacity
It measures the borrower's ability to repay a loan by comparing income against recurring debts and assessing the borrower's debt-to-income (DTI) ratio.
FICO scores have been around since
what is 1989
What is the best place/most used when shopping for a loan?
Banks and credit unions are a good place to shop for most loans.
Who is at most risk for a thin file?
You!!!
What is a Co-Signer?
A co-signer is a person who is obligated to pay back the loan just as you, the borrower, are obligated to pay. (Used to pay back the loan if you default.)
What is Capital?
Lenders also consider any capital the borrower puts toward a potential investment.
Whats the best way to build up credit
what is pay off dept
What is one of the most important things to do before applying for a loan?
It’s a good idea to run loan calculations before getting a loan. This allows you to see how much you’ll pay for the loan, and how a different loan amount (or interest rate) might save you money.
What is overcoming a "thin file"?
Get a retail or gas credit card or a card with your current bank.
Become an authorized user on someone else's credit card.
etc......
What is an authorized user?
As an authorized user, you’ll enjoy access to a credit card and you’ll build credit history, but you aren’t legally obligated to pay for your charges. i.e. on parents "account".
What is Collateral?
It gives the lender the assurance that if the borrower defaults on the loan, the lender can repossess the collateral. Car loans, for instance, are secured by cars, and mortgages are secured by homes.
What can drop your credit?
what is having too many cards
What is not paying bills on time
What do you do if you dont get approved for a loan?
You may have to figure out another solution, write a letter(s) to lenders, or you can try to borrow with the help of a co-signer.
What is checking for a "thin file"? (How do you check for one?)
A resource such as an online credit checker, can be very helpful.
What are good credit Habits
*Answers Vary*
What is Conditions?
The conditions of the loan, such as its interest rate and amount of principal, influence the lender's desire to finance the borrower. Conditions can refer to how a borrower intends to use the money. Consider a borrower who applies for a car loan or a home improvement loan. A lender may be more likely to approve those loans because of their specific purpose, rather than a signature loan, which could be used for anything.