Credit Basics
What is the term for borrowing money that you agree to pay back later?
What is credit?
This is the record of your borrowing and repayment activity.
What is a credit history?
What is the general term for money you owe?
What is debt?
Which agency protects consumers from unfair, deceptive, or abusive financial practices?
What is the Consumer Financial Protection Bureau (CFPB)
What do we call a credit file that has very little information due to limited use of credit?
What is a thin file?
This shows up on your account when someone else is allowed to use your credit card.
What is an authorized user?
What document summarizes your credit history and is used by lenders to determine creditworthiness?
What is a credit report?
What strategy focuses on paying off the smallest debts first to build momentum?
What is the Debt Snowball Method?
What federal agency enforces laws against deceptive advertising and fraud?
What is the Federal Trade Commission?
What legal process helps people get relief from debts they can’t repay but has long-term credit consequences?
What is bankruptcy?
This annual rate includes interest and all other loan fees and helps compare loan offers.
What is the Annual Percentage Rate (APR)?
What is the term for the three-digit number that summarizes your credit risk to lenders?
What is a credit score?
What method pays off the highest interest debts first to save the most money over time?
What is the Debt Avalanche Method?
What type of organization collects data on your credit behavior and provides it to lenders?
What is a credit bureau?
What part of your credit score is impacted when you open several new credit accounts at once?
What is new credit?
What do you call the ratio of your credit card balances to your credit limits, expressed as a percentage?
What is the credit utilization rate?
What company created the scoring model used by most lenders in the U.S.?
What is FICO?
What happens when you fail to repay a loan according to the terms agreed upon?
What is default?
What type of credit inquiry does not affect your credit score and is usually done for background checks or pre-approval offers?
What is a soft inquiry?
What term refers to the percentage charged on a loan or credit card balance, usually shown annually?
What is interest rate?
What formula is used to calculate net worth?
What is total assets minus total liabilities (debts)?
What is the term for a lender’s credit check that may impact your credit score?
What is a hard inquiry?
What do we call it when a lender reclaims property due to missed loan payments?
What is repossession?
Which factor makes up the largest part of your credit score calculation?
What is payment history?
What can negatively impact your ability to get loans, jobs, or housing and is caused by missed payments, defaults, or high debt?
What is a bad credit score?