Vocab
the supplying of money, goods, or services at present in exchange for the promise of future payment
Credit
cost of using credit, including interest and fees
finance charge
a numerical rating based on credit report info which presents a person's credit worthiness
credit score
refers to a persons reputation, how willing they are to pay a debt on time
Character
Act that ensures all consumers are given an equal chance to obtain credit
Equal Credit Opportunity Act
original amount borrowed
principal
pattern of past behavior in regard to repaying debt
credit history
a person with a strong established credit history who agrees to make payments if the borrower is unable
cosigner
refers to items owned, or assets
capital
Act that assures a consumer's right to access his or her credit file and dispute incorrect info
Fair Credit Reporting Act
backed by a pledge of property
secured credit
firm that collects info about the credit worthiness of consumers
credit bureau
APR or annual percentage rate
person's earning power, ability to pay debts on time
Capacity
What are two ways you can establish and maintain credit?
Apply for a credit card and use the card/pay the bills on time. Open checking and saving accounts and make regular deposits/avoid overdrawn checks. Put a utility in your name and pay the bills promptly.
property that is pledged to guarantee repayment
collateral
record of a particular consumer's transactions and payment patterns
credit report
period of time during which the balance may be paid in full to avoid finance charges
grace period
lenders consider these 3 things
character, capacity, and capital
When comparing credit cards what are a few things you should look at?
annual fee, apr, minimum payment, finance charge, other fees, credit limit, special features
set portion of the loan amount that the borrower must pay at regularly scheduled intervals
installment
evaluation of a consumer's credit history
credit rating
a final payment that is much larger than the other installments
balloon payment
What must consumers do to show they are financially responsible and can manage debt wisely?
take steps to build a record
3 ways to use credit card wisely?
save your receipts, set your own limit, pay the full balance each month to avoid finance charges, if not make the largest payment you can afford, and pay on time