Unit 5 Test Review - Credit

What is the Truth Lending Act?

• A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness

• It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.

• Loan with equal number of payments of the same amount over a fixed period of time.

• A method of identity theft carried out through the creation of a website, phone call, e-mail or solicitor that seems to represent a legitimate company

What is Phishing?

• A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness

• It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.

• Loan with equal number of payments of the same amount over a fixed period of time.

• A method of identity theft carried out through the creation of a website, phone call, e-mail or solicitor that seems to represent a legitimate company

What is an Installment (closed) Loan?

• A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness

• It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.

• Loan with equal number of payments of the same amount over a fixed period of time.

• A method of identity theft carried out through the creation of a website, phone call, e-mail or solicitor that seems to represent a legitimate company

What is Revolving (Open) Credit?

• A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness

• It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.

• Credit that is automatically renewed as debts are paid off. There is a credit limit or line of credit.

• A method of identity theft carried out through the creation of a website, phone call, e-mail or solicitor that seems to represent a legitimate company

What is a Credit Report?

• A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness

• It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.

• Credit that is automatically renewed as debts are paid off. There is a credit limit or line of credit.

• A method of identity theft carried out through the creation of a website, phone call, e-mail or solicitor that seems to represent a legitimate company

What is Principal?

• A loan that has an asset as collateral for the loan; e.g. house, car

• The original amount of money borrowed

• The cost of credit on a yearly basis, expressed as a percentage

• The amount of credit that a financial institution extends to a client. The maximum amount a credit card company will allow someone to borrow on a single card.

• This fee is charged by a credit card company each year for use of a credit card. This is a separate fee from interest rate on purchases.

What is Annual Percentage Rate (APR)?

• A loan that has an asset as collateral for the loan; e.g. house, car

• The original amount of money borrowed

• The cost of credit on a yearly basis, expressed as a percentage

• The amount of credit that a financial institution extends to a client. The maximum amount a credit card company will allow someone to borrow on a single card.

• This fee is charged by a credit card company each year for use of a credit card. This is a separate fee from interest rate on purchases.

What are Annual Fees?

• A loan that has an asset as collateral for the loan; e.g. house, car

• The original amount of money borrowed

• The cost of credit on a yearly basis, expressed as a percentage

• The amount of credit that a financial institution extends to a client. The maximum amount a credit card company will allow someone to borrow on a single card.

• This fee is charged by a credit card company each year for use of a credit card. This is a separate fee from interest rate on purchases.

What is a Secured Loan?

• A loan that has an asset as collateral for the loan; e.g. house, car

• The original amount of money borrowed

• The cost of credit on a yearly basis, expressed as a percentage

• The amount of credit that a financial institution extends to a client. The maximum amount a credit card company will allow someone to borrow on a single card.

• This fee is charged by a credit card company each year for use of a credit card. This is a separate fee from interest rate on purchases.

What is Credit Limit?

• A loan that has an asset as collateral for the loan; e.g. house, car

• The original amount of money borrowed

• The cost of credit on a yearly basis, expressed as a percentage

• The amount of credit that a financial institution extends to a client. The maximum amount a credit card company will allow someone to borrow on a single card.

• This fee is charged by a credit card company each year for use of a credit card. This is a separate fee from interest rate on purchases.