Intro to Credit

What is the principal of the loan?

• the initial amount of the loan

• the cost of borrowing the loan

• the period of time you take out the loan for

• a manager in charge of the loan

Type of loan used specifically for purchasing a home is a __________

• Mortgage
• Student Loan
• Equity Line of Credit
• Credit Card

Another name for open ended credit is ____________ credit

• Never ending
• Revolving
• Spinning
• Endless

This is when the interest rate will remain the same for the life of the loan

• Adjustable rate
• Balloon rate
• Never changing rate
• Fixed rate

If the collateral for your secured loan can be taken away, why get a secured loan at all?

• Because they usually have a higher interest rate

• Because they usually have a lower interest rate

• Banks give you an extra 90 days to make a missed payment

• Banks typically don't charge interest for the first 12 months

What is a line of credit extended to individuals or businesses who may use it as often as desired up to a specific dollar limit?

• Annual Percentage Rate

• Credit Cards

• Intermediate-term Loans

• Revolving Credit

Credit not backed by collateral

• car loan
• unsecured credit
• secured credit
• defered payments

The maximum amount you may borrow on a credit card is known as:

• creditworthiness
• credit report
• credit limit
• variable rate of credit

Having a high credit score will allow lenders to give you lower interest rates.

• True
• False

To build a good credit history, you should

• open as much credit as possible quickly
• use the maximum credit allowed on all your credit cards
• pay on time and as much of your balance as possible
• all of these