Loan and Credit Flashcard

Front

What is the main difference between a secured loan and an unsecured loan?

Back

A secured loan is protected by collateral, while an unsecured loan is not.

Front

What is a co-signer and what is the risk of being one?

Back

A co-signer is someone who helps you get a loan by guaranteeing the loan. The risk is that your credit score can be affected if the borrower defaults on the loan.

Front

What is the difference between a fixed interest rate and a variable interest rate?

Back

A fixed interest rate stays the same throughout the loan term, while a variable interest rate can change.

Front

What is the main reason why the speaker says payday loans are "kind of the worst"?

Back

Payday loans have very high interest rates.

Front

What is a good example of collateral for a secured loan?

Back

A car.

Front

What is the main benefit of having a good credit score?

Back

You can get a lower interest rate on a loan.

Front

What are the three major credit agencies that maintain credit reports?

Back

Experian, Transunion, and Equifax

Front

What is the highest possible FICO score?

Back

850

Front

What percentage of your credit score is determined by your payment history?

Back

35%.

Front

What is a credit report?

Back

A list of all your credit accounts and payments