Chapter 9 Vocab

Question 1

Credit

Answer 1

Money that a lender makes available to a borrower with the understanding that the borrower will repay the money in the future

Question 2

Credit bureau

Answer 2

Organization that collect credit information on individual consumers

Question 3

Credit history

Answer 3

The record of how one has used credit in the past

Question 4

Credit limit

Answer 4

The preset maximum amount you can borrow

Question 5

Credit report

Answer 5

Summarizes an individual’s existing and past credit history, including applications for credit of any kind, payment record for bills, whether you have paid late fees, and any other public information

Question 6

Credit score

Answer 6

A numeric score that uses your credit history to assess your creditworthiness

Question 7

Creditor

Answer 7

People who provide credit

Question 8

Equal Credit Opportunity Act

Answer 8

prohibits creditors from denying credit based on gender, age, race, national origin, religion, and marital status

Question 9

Fair Credit Reporting Act

Answer 9

Limits the sharing of your financial information only to firms that have a legal purpose to evaluate this information

Question 10

Fair Isaac Corporation

Answer 10

Credit scores are calculated based on a model created by Fair Isaac Corporation (FICO)

Question 11

Identity theft-

Answer 11

Occurs when someone uses your personal information without your permission for personal gain

Question 12

Installment credit

Answer 12

Used for specific purchases but allows the borrower more time to repay the money

Question 13

Interest

Answer 13

Fees charged by a lender on borrowed money

Question 14

Non-installment credit

Answer 14

Credit that is extended for a short term, such as 30 days or less

Question 15

Pretexting

Answer 15

occurs when someone improperly accesses your personal information by posing as someone who needs data for one reason or another

Question 16

Phishing

Answer 16

is when pretexting occurs online and can include emailing you and asking you to verify account information

Question 17

Pharming

Answer 17

uses email viruses to redirect you from a legitimate website to an official looking website designed to obtain your personal information

Question 18

Principal

Answer 18

The total amount of money outstanding on the loan

Question 19

Revolving open-end credit

Answer 19

Allows consumers to borrow up to some preset maximum amount, such as $1,000 or $10,000

Question 20

Shoulder surfing

Answer 20

occurs when someone in a public place skims personal information to use against you by overhearing your conversation or viewing your personal information

Question 21

Skimming

Answer 21

involves copying your credit card or debit card numbers from your cards