Loan and Credit Flashcard

Front

How can you calculate the difference in cost between store brand and name brand items?

Back

Subtract the total of the store brand items from the total for name brands.

Front

What key elements are used to calculate credit scores?

Back

Payment history, debt ratio, and types of credit.

Front

What is the total amount of money charged in addition to the original loan amount called?

Back

Interest.

Front

What happens to a credit card balance if a late payment is made?

Back

The interest will increase, and a late fee will be added.

Front

What is the most crucial aspect to assess when determining creditworthiness for the FICO score?

Back

Payment history.

Front

What is a credit score?

Back

A numerical representation of a person's creditworthiness based on their credit history.

Front

What does APR stand for?

Back

Annual Percentage Rate.

Front

What is the principal in a loan?

Back

The original sum of money borrowed or invested, excluding interest.

Front

How does a high debt-to-income ratio affect creditworthiness?

Back

It may lower creditworthiness, indicating a higher risk to lenders.

Front

What is a late fee?

Back

A charge imposed for failing to make a payment by the due date.