Ch 26 and 27 Flashcards
cosigner
person who signs your contract and is responsible if you do not follow through
fair credit billing act
correct billing mistakes
Unsecured loan
not backed by collateral
usury law
restricts amount of interest that can be charged
Equal Credit Opportunity Act
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
fair debt collection practices act
collection agent must identify themselves
no harassment
garnishment of wages
some contracts allow creditors to take all/some of $$ from paycheck
Credit limit
maximum amount you can spend/charge
repossess
take collateral
FTC
Enforce laws of credit
truth in lending disclosure
All costs of borrowing must be known
Credit Burden
don’t use more than 20% of your income for credit payments
What are the 5 C’s
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
Principal
amount borrowed
Credit bureau
agency that collects info about you and credit, provide credit reports, and scores.
How old do you have to be to apply for credit?
18
Grace Period
30 days
consumer credit protection act
helps consumers compare credit
stolen cards
requires creditors to inform consumers on cost of interest and terms
fair credit reporting act
incorrect info on files
right to know
right to be notified
right to privacy
overextending your credit
opening too many accounts and purchasing up to the credit limit
Bankruptcy
Relieved of all debts except student loan
Consolidation Loan
Combines all your debts into one loan with lower monthly payments
Secured Loan
Backed by collateral
