Credit Vocab
This is the ability to borrow money or purchase something now and pay for it later.
Credit
This C refers to a borrower's history of repaying debts.
CHARACTER
This section of a credit report can include a person's name, address, and date of birth.
Personal Information
This type of credit is backed by collateral.
Secured Credit
This is the percentage charged for borrowing money.
Interest Rate
This is money that a person owes to another person, business, or financial institution.
Debt
This C refers to a borrower's ability to repay a loan.
CAPACITY
This part of a credit report shows whether payments were made on time, late, or missed.
Payment History
Most credit cards are an example of this type of credit because they are not backed by specific collateral.
Unsecured Credit
This is the smallest payment a borrower is required to make on a credit account.
Minimum Payment
This is a record of how a person has used and repaid credit.
credit history
This C refers to money or assets the borrower already has.
CAPITAL
A credit card has a $5,000 limit and a $2,000 balance. What is the credit utilization?
40%
A credit card allows someone to borrow, repay, and borrow again up to a limit. What type of credit is this?
Revolving Credit
This fee may be charged when a borrower fails to make a required payment on time.
Late Fee
This number helps lenders estimate how likely a person is to repay borrowed money.
Credit Score
This C refers to property that can be used to secure a loan.
COLLATERAL
A person notices an account on their credit report that they never opened. What problem might this indicate?
Identity Theft
Auto loans, mortgages, and personal loans are examples of this type of credit.
Installment Credit
This describes lending practices that take unfair advantage of borrowers and can make debt problems worse.
Predatory Lending
DAILY DOUBLE This term describes how trustworthy a borrower appears to a lender based on their ability and history of repaying debt.
DAILY DOUBLE Creditworthiness
A lender considers factors surrounding the loan and the economy. Which C is this?
CONDITIONS
DAILY DOUBLE A person finds incorrect information on their credit report. What action can they take to ask that the information be investigated and corrected?
DAILY DOUBLE Dispute
This type of short-term, high-cost loan can become difficult to repay and may lead to repeated borrowing.
Payday Loan
A credit card has a $2,000 limit and a $500 balance. What is the credit utilization?
25%