Types of Credit
This type of credit includes credit cards and home equity lines of credit.
What is revolving credit?
A score between 630 and 689 falls into this category.
What is fair credit?
These are short-term, high-cost loans that are usually due on your next payday.
What are payday loans?
This is the first step in the borrowing process.
What is determining the amount to borrow?
Making a larger one of these reduces the amount that must be borrowed.
What is a down payment?
This type of credit requires fixed payments over a set period of time.
What is installment credit?
The percentage of available credit that has been borrowed.
What is credit utilization?
This type of bank specializes in international trade and multinational corporations.
What is a merchant bank?
This step involves choosing the loan that best fits your financial situation.
What is selecting the right loan program?
Shopping around for a lower one of these can reduce borrowing costs.
What is an interest rate?
This type of credit is based on the borrower's reliability rather than collateral.
What is unsecured credit?
The three major credit bureaus provide this document.
What is a credit report?
This loan helps consumers purchase homes.
What is a mortgage?
During this stage, a lender reviews your credit and assets.
What is processing the loan?
Paying off a loan in 15 years instead of 30 years reduces this cost.
What is interest?
This type of credit is guaranteed by an asset of equal or greater value.
What is collateralized credit?
These three mistakes commonly appear on credit reports.
What are incorrect personal information, outdated information, and incorrect payment status?
This type of loan helps consumers purchase vehicles.
What is an auto loan?
This stage involves reviewing and signing final loan documents.
What is closing the loan?
This habit involves checking debts regularly and tracking progress.
What is reviewing debt periodically?
This source of borrowing is also known as social lending or crowd lending.
What is peer-to-peer lending?
A credit score above 720 is considered this.
What is excellent?
The asset pledged to secure a loan is called this.
What is collateral?
Debt-to-income ratio is calculated using these two numbers.
What are total monthly debt and gross monthly income?
Name two bad borrowing habits.
What are failing to budget, ignoring credit reports, delaying payments, spending more than can be earned, or borrowing for luxuries?