Ch 26 and 27

Question 1

cosigner

Answer 1

person who signs your contract and is responsible if you do not follow through

Question 2

fair credit billing act

Answer 2

correct billing mistakes

Question 3

Unsecured loan

Answer 3

not backed by collateral

Question 4

usury law

Answer 4

restricts amount of interest that can be charged

Question 5

Equal Credit Opportunity Act

Answer 5

Application can only be judged by financials
Denied must be told why
Can’t be denied for low income, large current debts, poor payment record

Question 6

fair debt collection practices act

Answer 6

collection agent must identify themselves

no harassment

Question 7

garnishment of wages

Answer 7

some contracts allow creditors to take all/some of $$ from paycheck

Question 8

Credit limit

Answer 8

maximum amount you can spend/charge

Question 9

repossess

Answer 9

take collateral

Question 10

FTC

Answer 10

Enforce laws of credit

Question 11

truth in lending disclosure

Answer 11

All costs of borrowing must be known

Question 12

Credit Burden

Answer 12

don’t use more than 20% of your income for credit payments

Question 13

What are the 5 C’s

Answer 13

Capacity- ability to pay debt when due
Character- what kind of person you are
Capital- value of your possessions
Collateral- property or valuables (security for a loan)
Credit History- credit check through a credit bureau

Question 14

Principal

Answer 14

amount borrowed

Question 15

Credit bureau

Answer 15

agency that collects info about you and credit, provide credit reports, and scores.

Question 16

How old do you have to be to apply for credit?

Answer 16

18

Question 17

Grace Period

Answer 17

30 days

Question 18

consumer credit protection act

Answer 18

helps consumers compare credit
stolen cards
requires creditors to inform consumers on cost of interest and terms

Question 19

fair credit reporting act

Answer 19

incorrect info on files
right to know
right to be notified
right to privacy

Question 20

overextending your credit

Answer 20

opening too many accounts and purchasing up to the credit limit

Question 21

Bankruptcy

Answer 21

Relieved of all debts except student loan

Question 22

Consolidation Loan

Answer 22

Combines all your debts into one loan with lower monthly payments

Question 23

Secured Loan

Answer 23

Backed by collateral