Credit Flashcards
Character
Measure of your sense of financial responsibility
Creditworthiness
A measure of your reliability to repay a loan
Credit history
A record of your past borrowing and repayments
Consigner
Someone who is more experienced assisting a first timer
Capacity
A measure of your financial ability to repay a loan
Capital
The value of what you own including savings, investments and property
Credit bureau
A company that collects information about consumers credit history and sells it to lenders
Credit rating
A measure of your creditworthiness
3 factors upon which lenders judge creditworthiness
Character, capacity, capital
What is a loan application and what is it used for?
The form you complete when you want a loan
Where do credit bureaus get their information about adult
Stores, banks, utility compartments on anything
A credit rating is based on what numerical scale
300-850
Describe the 5 factors that your credit rating is based on
Payment history, current debt, length of credit history, new account and inquiries
What steps can one take to increase your credit score
Close any credit accounts that are rarely used
What are the immediate steps to repair identity theft?
- Place an initial fraud alert
- Order your credit reports
- Create an identity theft report
Three types of identity theft
Tax related identity theft
Child identity theft
Medical identity theft
Truth in lending act
Requires all bank to calculate credit cards in the same way. Must provide finance charge/annual % rate
Fair credit reporting act
Can check your credit reports
Consumer credit reporting reform act
Makes it easier for consumers to correct mistakes in their credit report
Fair credit billing act
Help correct credit card billing mistakes
Fair debt collection practices act
Stop debt collection agencies from using abusive practices
Describe four things you can do to minimize credit risks
Pay more than the minimum
Avoid too many credit cards
Pay cash
Keep accurate records
