Credit

Question 0

Used to determine credit risk

Answer 0

Payment history 35%
Amount owed 30%
Length of credit history 15%
New credit ( how many apps you have out) 10%
Types of credit currently in use 10%

Question 1

FICO

Answer 1

Fair Isaac Corporation developed a method to determine your credit worthiness (credit score)

Question 2

Long term

Answer 2

Not meant to be paid off in one payment
Usually requires collateral
Scheduled monthly payments applied to both principal and interest

Question 3

Secured loans

Answer 3

Require collateral

Unsecured loans don’t

Question 4

Signature loans

Answer 4

Based upon credit rating and references

Question 5

Short term loans

Answer 5

Credit cards
Travel/entertainment card
Charge card

Question 6

Credit card

Answer 6

Revolving credit
Can continue to borrow up to a preset limit
Generally requires a minimum payment 2% to 4% of balance

Question 7

Travel/entertainment card

Answer 7

Similar to credit card but requires full payment each month
No interest but requires a membership fee
(American express, diners club)

Question 8

Charge card

Answer 8

Can only be used at a certain store