Credit Study Guide: Practice Flashcard

Front

What is a credit limit?

Back

The maximum amount you can charge on a credit account

Front

What does APR stand for in credit terms?

Back

Annual Percentage Rate

Front

Which term describes a loan paid in equal monthly installments?

Back

Installment credit

Front

What is the purpose of a credit report?

Back

To provide a history of your credit usage and payments

Front

What is a grace period?

Back

The time allowed to make a payment before interest is charged

Front

Which factor does NOT affect your credit score? Options: Payment history, Amounts owed, Age, New credit inquiries

Back

Age

Front

What is revolving credit also known as?

Back

Open credit

Front

What does a co-signer do?

Back

Agrees to repay the loan if the borrower defaults

Front

Finance charge

Back

The charge for using a credit card, including interest and fees

Front

Which of the following is a negative item on a credit report?

• A paid-off loan
• Late payment
• Credit inquiry
• New credit account

Back

Late payment