Unit 4 Credit Review

Front

What are the 3 C's of credit?

Back

Capacity, Character, Collateral.

Front

What does 'capacity' refer to in credit?

Back

It refers to your financial ability to repay a loan.

Front

What does 'character' mean in the context of credit?

Back

It refers to your credit history and reliability in repaying debts.

Front

What does 'collateral' mean?

Back

It is an asset that a borrower offers to a lender to secure a loan.

Front

What is the FICO score range?

Back

The FICO score ranges from 300 to 850.

Front

What is the purpose of a credit report?

Back

To provide lenders with information about a borrower's credit history.

Front

Name the three major credit reporting agencies.

Back

Experian, TransUnion, Equifax.

Front

What is the significance of a high credit score?

Back

A high credit score indicates a lower risk for lenders and can lead to better loan terms.

Front

What does it mean to 'repay your debt'?

Back

It means to pay back the borrowed amount along with any interest.

Front

What is the impact of late payments on your credit score?

Back

Late payments can significantly lower your credit score.