Glossary of Terms- Credit Score and Credit Report Unit

What is the official website for getting a free credit report from the credit bureaus?

• FreeCreditScore.com

• CreditReportNow.com

• CreditCheckCentral.com

• AnnualCreditReport.com

Answer explanation

The official website for obtaining a free credit report from the credit bureaus is AnnualCreditReport.com. This site is authorized by federal law to provide free annual credit reports.

What is the term for a person requesting a loan?

• Borrower

• Creditor

• Debtor

• Lender

Answer explanation

The term for a person requesting a loan is 'Borrower'. A borrower is someone who takes out a loan from a lender, while a creditor is the one who lends money, and a debtor is a broader term that can refer to anyone who owes money.

Which companies collect information from creditors & lenders about consumer behavior?

• Equifax, Experian and TransUnion

• Credit Karma, Credit Sesame and WalletHub

• ChexSystems, TeleCheck and Early Warning Services

• FICO, VantageScore and Beacon

Answer explanation

Equifax, Experian, and TransUnion are the major credit bureaus that collect consumer credit information from creditors and lenders, making them the correct choice for this question.

What is the term for a service that helps consumers pay their debts and improve their credit?

• Bankruptcy Filing

• Debt Settlement

• Credit Repair

• Credit Counseling

Answer explanation

Credit counseling is a service that assists consumers in managing their debts and improving their credit scores through budgeting advice and debt management plans, making it the correct choice.

What is another term for a credit report?

• Credit History

• Credit File

• Credit Limit

• Credit Score

Answer explanation

A credit report is often referred to as a credit file, which contains detailed information about an individual's credit history and accounts. Other options like credit score and credit limit are related but not synonymous.

What is the total amount that a company will allow an individual to charge to a credit card?

• Credit File

• Credit Limit

• Credit History

• Credit Score

Answer explanation

The total amount a company allows an individual to charge to a credit card is known as the 'Credit Limit'. This is the maximum balance that can be carried on the card.

What records are included in a credit report?

• Consumer name, addresses, employment, credit and loan histories, inquiries, collection records, public records

• Only inquiries and collection records

• Only consumer name and addresses

• Only credit and loan histories

Answer explanation

A credit report includes comprehensive records such as consumer name, addresses, employment, credit and loan histories, inquiries, collection records, and public records, making the first choice the correct answer.

What is a number based on a consumer’s credit history used by businesses to understand how risky a borrower is?

• Debt-to-Available-Credit Ratio

• Interest Rate

• Credit Score

• Principal

Answer explanation

A credit score is a numerical representation of a consumer's credit history, used by businesses to assess the risk of lending. It helps determine how likely a borrower is to repay their debts.

What is the amount of money owed?

• Principal

• Interest

• Debt

• Credit Limit

Answer explanation

The amount of money owed is referred to as 'Debt'. It encompasses both the principal and interest, making it the correct choice among the options provided.

What ratio measures how much of your available credit you are using?

It's more commonly called credit utilization(how much of your credit you are using).

• Interest Rate

• Debt-to-Available-Credit Ratio

• Credit Score

• Principal

Answer explanation

The ratio that measures how much of your available credit you are using is called the Debt-to-Available-Credit Ratio. This ratio is crucial for understanding credit utilization, which impacts your credit score.