Review 3-5Credit Score

Front

When considering creditworthiness, which person is likely to pay the GREATEST credit card finance charges if they all charge the same amount each month on their cards? Georgia, who sometimes pays more than the minimum amount; Mark, who usually pays his credit card bill in full, if he can afford to; Mary Lou, who always pays the full credit bill each month; James, who always pays the minimum each month.

Back

James, who always pays the minimum each month

Front

the borrower's ability to pay back a loan

Back

capacity

Front

owned assets (typically liquid) that can be seized if the loan isn't paid

Back

collateral

Front

Why is it important to build a good credit history at a young age?

Back

help you get approved for things like an apartment, a car loan, or even a job.

Front

Which situation explains how a credit becomes a debt? A mechanic exchanges services with a plumber, and incurs a debt to the plumber; A buyer purchases furniture on credit, and then owes a debt to the furniture store; An electronics store extends credit to a buyer, and then owes a debt to the buyer; A farmer purchases used equipment in exchange for a share of the crops grown.

Back

A buyer purchases furniture on credit, and then owes a debt to the furniture store.

Front

the process that lenders use to determine if money should be borrowed

Back

3 C's of Credit

Front

debt to asset ratios, cash flow statements, & liquidity are used to determine _____

Back

capacity

Front

borrowing against a mortgage or equipment is an example of _____

Back

collateral

Front

Which of these is LEAST LIKELY to determine credit worthiness? length of employment, payment history, personal health history, personal educational background

Back

personal health history

Front

references, your reputation, credit score, and work experiences impact ______

Back

character