Credit

The 4 C's of Credit

100

Something of value that is used to secure a loan.  Usually required for those that have no credit or bad credit

Collateral 

200

This C gives the lender an idea of what type of person you are.  Your credit history can be used to determine this

Character 

300

This C looks at how much money you make vs. how much debt you have

Capacity

400

These are things of value that you own.  

Capital

500

This C looks at what the loan is being used for

Conditions 

Loans

100

The amount you pay in interest per year

APR

200

The initial amount you borrowed

Principal

300

The additional amount charged to you while paying a loan

Interest

400

Money borrowed to buy a house

Mortgage

500

Portion of a purchase price paid by cash at the time the purchase.

Down payment

Credit Laws

100

This law requires creditors to let customers know what the credit will cost them before they get the credit.

Truth in Lending Act

200

This law prohibits creditors from using any reasons besides financial reasons for denying credit.  

Equal Credit Opportunity Act

300

This law protects consumers against harassing or abusive behavior by collection agencies.

Fair Debt Collection Act

400

Protects customers from unfair billing acts

Fair Credit Billing Act

500

This law states creditors must only report accurate information

Fair Credit Reporting Act

Credit Problems

100

This is the legal proceeding where a person is declared unable to pay debts and assets are sold.

Bankruptcy 

200

A person has a history of missing payments, paying late, and has also defaulted on one loan. This person shows a lack of:

Character

300

Apply for a lot of different loans in a short period of time will effect this

Credit rating

400

This law protects consumers from being harassed by those attempting to collect debt

Fair Debt Collection Act

500

This nonprofit organization helps consumer reorganize their debts to help get out of debt and understand better financial responsibility.  

Consumer Credit Counseling Service

Calculations

100

Calculate the total interest paid on the following:

17,000

6% APR

3 years

$3060

200

Calculate the interest paid each year on the following:

10,000

3.99% APR

2 years

$399

300

Calculate the total amount borrowed (including interest:

$175,000 - Loan Amount

5.99% APR

30 Years

$489,475

400

Calculate the principal:

8,500 - Loan Amount

3.99% APR

4 Years

$1,500 Down Payment

$7000

500

Calculate the monthly payment on the following:

12,500 - Loan Amount

3.99% APR

4 Years

$1,200 Down Payment

$272.99