What is Credit? 2
What type of credit must be paid in the same amount each month?
a. all credit
b. installment credit
c. revolving credit
d. ARMs
Installment Credit
Which of the following might lower your credit score?
a. having worked at the same job for three years
b. having paid all your bills on time
c. never having applied for credit before
d. never having "bounced" a check before
Never having applied for credit before
A person or company will file for bankruptcy if they are able to pay their underwhelming debts on time each month.
True or False
False
This type of credit does not have a fixed number of payments. An example would be a credit card.
Revolving Credit
What is the MOST IMPORTANT part of a person's credit report in FICO?
a. length of history
b. payment history
c. amounts owed on accounts
d. new credit
Payment History
The ability to repay back what you owe.
Capacity
This a legal process that helps people and businesses who can't pay their debts get a fresh start. It allows debtors to discharge some or all of their debts, or create a plan to repay them.
Bankruptcy
An asset used to back a loan is called what?
Collateral
This is a measure of how likely someone is to repay their debts. It's a key factor in determining whether someone is a good candidate for credit, such as a loan or credit card. (hint: not one of 3 C's)
Creditworthiness
A credit score ranges from ____ to _____.
1. 300
2. 850
Bankruptcy can remain on a person's credit report for at least ____ to _____ years.
7 to 10 years.
A student loan is example of this type of credit?
Installment Credit
1. This is a record of an individual's personal credit history. It provides detail of how much the person has borrowed, from whom, and whether the bills have been paid on time.
Credit Report
John has a credit score of 350
Shawn has a credit score of 640
Dana has a credit score of 730
Rochelle has a credit score of 830
Which two people with have the lowest interest rates offered to them?
Dana and Rochelle
Chapter 7 is known as this type of bankruptcy where as Chapter 13 is known as this type of bankruptcy.
(2 answers)
1. Liquidation
2. Reorganization
This is a record of your behavior related to borrowing and repaying loans.
Credit History
What are the 3 C's of Credit?
Capacity
Character
Collateral
List the 5 elements of a credit score.
1. Payment History
2. Credit Utilization
3. Length of Credit History
4. New Credit
5. Credit Mix
A Chapter 13 bankruptcy stays on a debtor's credit report for
a. five years
b. seven years
c. ten years
d. thirteen years
Seven years
•age
•gender
•race
•marital status
•religion
These are called demographics, can creditors use this to make a decision?
No, they may be asked but can't be used in the decision making process.