Credit Essential Terms

A credit card is tied to your checking account.

• True

• False

Used to finance a specific purchase for a specific amount of time. Regular payments are made to pay the interest and the principal.

• Revolving Credit

• Installment Loan

• Variable Rate

• Fixed Rate

An open line of credit that can be used for any purchases as long as you're under the credit limit. Payment amounts vary each pay period based on the size of debt.

• Revolving Credit

• Installment Loan

• Variable Rate

• Fixed Rate

Private student loans typically have a lower interest rate.

• True

• False

Which of the following would be an example(s) of an installment loan? (Check all that apply)

• Credit Card

• Mortgage

• Auto Loan

• Debit Card

Which of the following is TRUE about a co-signer on a loan:

• Technically they have no legal ties to the loan in which they co-sign

• If the borrow defaults on paying the loan the co-signer is responsible for the debt

• The co-signers credit score will not be impacted if payments on the debt are not made

• Co-signing is not a big deal, everyone should do it!

Something of value that can be used to secure a loan:

• A pinky promise

• Collateral

• Outstanding debt

• Installment

With this factor, lenders are looking at "will you repay the debt?" Factors include have you used credit before and do you pay your bills on time.

• Character

• Capital

• Capacity

• Collateral

A federal unsubsidized loan means that the government will pay your interest while you are in school.

• True

• False

Which factors listed affect your credit score? (Check all that apply)

• Character

• Capital

• Capacity

• Collateral