Credit Types
What is the term for the ability to borrow money or access goods or services with the understanding of repayment?
Credit
Name the three debt management strategies we discussed.
Snowball, avalanche, debt consolidation
What do you call one that provides funds to individuals or businesses with the expectation of repayment?
Lender
Name three types of credit.
Revolving, open, installment
Name the debt repayment method that involves making minimum payments on all debts, then using extra money to pay off the one with the highest interest rate.
Avalanche
What do you call one that receives money with the agreement to repay within a specified period of time?
Borrower
What is an example of revolving credit?
Credit card
This debt repayment method involves listing all due balances in ascending order, targeting the smallest debt first by allocating any extra money towards it. What is it called?
Snowball
Which factor is the most important in a FICO score?
Payment history
This type of credit, extended for a specific purpose and requiring full payment for each period, is known as what?
Open credit
What is a lump sum?
an amount of money paid all at once, as opposed to an amount that is paid in installments
How many factors are taken into consideration in a FICO score?
Five
What category of credit involves a fixed payment schedule for a specified duration?
Installment credit
What do you call the money that is left over after paying taxes and purchasing essential goods?
Discretionary income
Name all factors that go into a FICO score.
Payment history, amounts owed, length of history, new credit, credit mix