credit score & loans

Question 1

Installment Loans

Answer 1

Used to finance a specific purchase for a specific amount of time.

Examples: Mortgages, Auto Loans

Question 2

Revolving Credit

Answer 2

An open line of credit that can be used for any purchases as long as you’re under the credit limit.

Examples: Credit Cards

Question 3

Variable-Rate

Answer 3

Interest rate can change during the time of the loan

Question 4

Fixed-Rate

Answer 4

Interest rate remains constant during the duration of the loan

Question 5

Credit Score

Answer 5

• Why do I need a good credit score?: It allows getting loans/credit lines, with low interest and rewards

-Purpose: It is used to determine what risk a loaning agency takes when loaning you money.

Question 6

dangers of using credit?

Answer 6

Making late payments,Applying for a lot a credit at once,Closing a credit account, Having high debts

Question 7

Why Use Credit

Answer 7

Consumer protection against bad products, Insurance on car rentals, Rewards or cash back, Don’t need to carry cash, Builds credit score

Question 8

Chapter 7

Answer 8

straight or ordinary bankruptcy; known as liquidation; liquidate assets to pay off debt

Question 9

Chapter 13

Answer 9

debt repayment plan; allows you to keep assets as part of the negotiation to lower the amount of money owed