Credit Vocabulary
The amount of money you borrow.
What is principal?
This secures a secured credit card.
What is a deposit?
This secures a mortgage.
Strategies to get a better interest rate.
What is get a better credit score? Shop around for interest rates?
The portion of your credit score that is determined by how long you've used credit.
What is credit history?
The amount of time you have to pay back a loan.
What is the term?
The rate charged when you do not pay a credit card back in full, usually expressed as a % over a year.
What is APR?
A house loan with an interest rate that changes based on the market conditions.
What you can do in order to pay lower monthly payments but more interest overall.
What is extend the loan term?
What is payment history and amounts owed (credit utilization)?
The amount of money charged to borrow money, usually a percentage.
What is the interest rate?
A term for a person who pays their entire credit card in full and on time each month.
What is a deadbeat?
An amount of money you put toward the principal of your loan.
A way you can decrease how much interest you pay by increasing how much you pay toward your principal up front.
What is increase your down payment?
The single most important action you can take to improve your credit score.
What is collateral?
This standardized document includes information about a credit card like APR and fees.
What is a Schumer Box?
The process by which your total amount owed on an installment loan is broken down into equal monthly payments including the principal and interest.
What is amortization?
A strategy where you increase your monthly payments which reduces how much you will pay in total on a loan.
What is pay more than the minimum or decrease the term length?
An example of someone other than a lender who can look at your credit report.
What is a landlord? utility company? Employer?
The maximum amount I can charge to a line of revolving credit.
What is a credit limit?
The smallest amount I can pay per month and remain in good standing with a credit card company.
As the term of your loan goes on, you pay more and more toward __________ and less and less toward _________.
What is principal and interest?
Mrs. Stanton's most important piece of credit advice. BE SPECIFIC.
What is pay on time and in full?
Two ways to start building credit as a young person.
What is 1. become authorized user 2. co-sign with a parent 3. secured credit card 4. build relationship with bank