Credit Basics
The ability to borrow money or access goods or services with the understanding that you'll pay later.
What is credit?
Money borrowed that is expected to be paid back with interest.
What is a loan?
A card that allows you to borrow money up to a certain limit to make purchases.
What is a credit card?
A numerical representation of a person's creditworthiness.
What is a credit score?
Period of time between billing statements, usually 20 to 45 days.
What is a biling cycle?
A record of a person's credit history, including credit accounts, payment history, and outstanding debts.
What is a credit report?
Loans specifically for funding education, which may have different repayment terms and interest rates.
What are student loans?
The smallest amount you can pay each month to keep your account in good standing.
What is a credit payment minimum?
What is the most common credit score range?
300-850
The length of time a borrower has to repay a loan.
What is a loan term?
Name one benefit of having good credit.
What is __________?
A specific type of loan used to purchase real estate is usually secured by the property itself.
What is a mortgage?
The cost of borrowing on a yearly basis.
Annual Percentage Rate; APR
How often should you check your credit report?
What is atleast once a year?
A penalty that is charged if the credit card is used past the credit limit.
What is an overdraft fee?
Credit backed by collateral.
What is secured credit?
A loan has a constant interest rate.
What is a fixed interest rate?
The maximum amount of money you can borrow on a credit card.
What is credit limit?
What is considered a good credit score?
A card issued by a bank allowing the holder to take money out of an account immediately.
What is a debit card?
Factors that affect credit score. You must name all 5.
Payment history, credit utilization, length of credit history, types of credit, and new credit inquiries.
A loan interest rate can change over time.
What is a variable interest rate?
A program that allows cardholders to earn points, cash back, or other benefits based on their spending.
What is a credit card rewards program?
What can happen if you have a low credit score?
You may face higher interest rates, loan denials, or difficulty renting an apartment.
The initial amount invested or borrowed.
What is a principal?