Vocabulary
What is credit?
(Yes, I am actually asking you this time Gabe.)
The ability to acquire money, goods, or services from others without immediate payment.
Short-Term loans are typically paid back within 18 months.
True
Long Term Loans are paid over periods longer than ___ years.
10
What does APR stand for?
Annual Percentage Rate
850
Credit is considered a ___________ and a convenience.
Privilege
Intermediate Loans are often used for operating expenses.
False. Typically used for things such as vehicles, or furniture.
Intermediate Loans are typically paid in a time range of ___ to ___.
18 Months, 10 Years
The cost of credit
With a FICO score of 700-850, typically your loan process is __________.
Smooth
This is what lenders typically charge in addition to the original amount. (2 Items)
Interest and Fees
Your FICO score is only determined by:
1. Past Bill Payment
2. Whether you've been, sued, arrested, or filed for bankrupcy.
False. Where you live is also a factor.
To acquire credit you can go to a bank, ________,________,_________.
Mortgage Company
Credit Union
Credit Card Company
Credit Score
With a lower credit score, what can you expect from your interest rates on a loan.
Higher Interest Rates
This is used as a back up plan for the bank in case the borrower does not pay back their loan.
Collateral
A credit score of 525, typically means medium risk with higher interest rates.
False. Anything below a 550=No Loan
The minimum payment amount is based on what?
The size of the debt.
What is the process of figuring the amount of interest owed over the span of a year?
I= P x R x T
How long will it take to remove a collections account from your credit report?
7 Years
What does FICO stand for?
Fair Isaac Corporation
A FICO rating of R6 means that the bank is in the repossession stage.
False. R6 means you have no existing credit.
What are the 4 extra charges you may receive from a credit card company?
Annual Fees, Interest, Rate Fees, Cash Advance Fees
Within Revolving Credit, when is interest charged?
It is charged on the unpaid balance of the account.
What are 2 tips for improving your credit score?
Pay bills on time
Don't open a number of new credit accounts
Keep balances Low
Apply and open new accounts only when needed