Unit 5 Flashcard: Credit

Front

Banks and lenders use credit scores to determine . . .

Back

The likelihood someone is able to repay debt

Front

__________ require the borrower to put up collateral for the loan

Back

Secured loans

Front

Which of the following is part of the formula that determines a person's credit score? Their income level during a one year period, The percent of income that they invest into mutual funds, The dollar amount in their savings funds, Their history of payments made to lenders

Back

Their history of payments made to lenders

Front

Which is an example of an appreciating asset? A computer used for business purposes, A new car purchased within the past 6 months, A piece of farming equipment, A home

Back

A home

Front

What is the best way to avoid falling into debt? Options: Use credit to pay for large expenses now so that you have plenty of time to pay it off, Only buy things that you can purchase with cash, or whose balance you can pay off in full every month, Use airline miles earned through a credit card to help pay for a vacation, Take out a small loan for any purchases over $1,000

Back

Only buy things that you can purchase with cash, or whose balance you can pay off in full every month

Front

When looking over your credit report, it's important to make sure . . .

Back

No lines of credit have been opened under your name without your knowledge

Front

How does being irresponsible with a credit card impact your credit score? Consider the consequences of bad credit.

Back

It can lower your credit score, making it harder to get loans, rent an apartment, or secure low-interest rates.

Front

A HELOC is a loan that...

Back

Used by owners to borrow against the equity in their home.

Front

A Mortgage is...

Back

A loan that typically lasts 15-30 years and is used to buy a house.

Front

A Personal Loan is...

Back

A loan used to move several debts into one payment. They’re usually for a fixed amount and have fixed payments.