Credit

Front

What is an annual fee?

Back

A yearly fee associated with having a credit card, separate from the interest rate on purchases.

Front

What does character refer to in credit assessment?

Back

It shows your integrity and is reflected in your credit score.

Front

What is a credit limit?

Back

The maximum amount of credit that a person can borrow.

Front

If my credit limit is $7,500, what is the maximum amount I could utilize without negatively impacting my credit score?

Back

$2,250.

Front

What is a credit score?

Back

A numerical rating calculated on someone’s ability to pay back the money they borrowed.

Front

What is the difference between APR and interest rate?

Back

APR (Annual Percentage Rate) includes the interest rate plus any fees or additional costs associated with the loan.

Front

What is collateral?

Back

An asset that a borrower offers to a lender to secure a loan.

Front

What does capacity refer to in credit assessment?

Back

It refers to a borrower's ability to repay a loan based on their income and current debts.

Front

What is the purpose of a credit report?

Back

To provide a detailed account of an individual's credit history, including credit accounts, payment history, and outstanding debts.

Front

What is a secured credit card?

Back

A credit card backed by a cash deposit from the cardholder, which serves as collateral.