W!SE Credit Vocab #1

Which item is important to consider when selecting a credit card?

• Annual Percentage Rate (APR)

• Fees

• The look of the credit card

• Both APR and fees

What is a benefit of having a good credit score?

• Loan sharks will be less likely to bother you.

• You'll get accepted to better education institutions.

• You'll get more job offers.

• When you need a loan, you'll have more loan offers to pick from.

The cost of a secured loan is typically lower than the cost of an unsecured loan because _______.

• it requires collateral.

• the loan takes longer to get.

• it has high interest rates.

• your parents will make sure you pay it back.

What will happen to your credit score if you do not manage your debt wisely?

• You won't be able to track your credit score

• Your credit score will go up

• Your credit score will go down

• It will not affect your credit score

Paying only the minimum balance on your credit card can lead to...

• an increase in your credit score

• paying more interest.

• late fees

• All of the above

Money owed to another person or company.

• Debt

• Default

• Lien

• Principal

Something of value that a borrower lets the lender claim if a loan is not repaid.

• Collateral

• Repossession

• Lien

• Principal

A credit rating developed by Fair Isaac & Company in the late 1950s, now widely used by lenders and employers. It consists of numbers ranging from 300 – 850.

• FICO Score

• APR

• Lien

• Principal

The rate of interest that is charged for using credit

• APR

• FICO Score

• Lien

• Principal

Equifax, Transunion, and Experian keep a record of consumer’s credit transactions. These are called. . . .

• Credit Reporting Agencies

• Debt Collectors

• Credit card agencies

• Finance Charges