Credit and Banking

What is the real definition of "credit"?

• Agreement where one borrows money and pays it back later

• Act of taking money from a general public collection of money

• Borrowing money and repaying it with service

• Introduction of your finances to banks

In the context of this lesson, what does "credit" become synonymous to?

• Financial reputation

• Social security

• Educational capability

• Advanced placement

Why do banks look at credit when you borrow money from them?

• To see how much money you're allowed to receive

• To determine if you're a good financial risk

• It is a person's civic duty to have credit.

• To offer you the best deal you can get

Which one determines if you are a good credit risk?

• Marital status, age, educational background and family name

• Character, capacity, capital, collateral and conditions

• Currency, culture, custom, creativity and cash income

• Previous jobs, recommendation letters, evaluations and personal skills

In determining your credit risk, banks ask for a down payment for your loan. What is this called?

• Capacity

• Capital

• Cash tip

• Custom payment

In determining your credit risk, banks ask you to put up a property you own against a loan. In the event that you fail to pay the loan, they will take the property. What is this called?

• Capacity

• Conditional

• Collateral

• Co-payment

In determining your credit risk, banks check if you can take on more loans based on your current financial situation. What is this called?

• Conditions

• Conditional

• Capacity

• Co-payment

In determining your credit risk, banks base it on the current economic situation. What is this called?

• Conditions

• Caveat

• Character

• Closure

As a beginner, which of these is the best way to establish credit?

• Get a small loan.

• Have a debit account.

• Do not do business with banks.

• Keep your money in a piggy bank.

As a beginner, which of these is the best way to establish credit?

• Apply for a scholarship.

• Avoid credit cards.

• Get a stable full-time job.

• Be a cosigner to someone else's loan.