Credit 1 - What is Credit?

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What is credit?

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Borrowed money

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Revolving credit is...

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a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time.

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If the collateral for your secured loan can be taken away, why get a secured loan at all?

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Because they usually have a lower interest rate

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A loan which the borrower must repay the amount in a specified number of equal payments.

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Closed‐end credit

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A line of credit established in advance so the borrower does not have to apply for credit each time new credit is desired.

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Open‐end credit

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An example of closed‐end credit is a secure credit card.

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False

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An unsecured loan is backed by collateral.

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False

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What must you have in order to get a home equity loan? Options: Car, House, College Education, A dog

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House

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What is the term for the person who will sign a loan document with you to help you obtain credit?

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Cosigner

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A simple definition of credit could be stated as...

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Buy now, pay later