WorksheetsUnderstanding Credit Basics Vocab Quiz
Total questions: 30
Worksheet time: 15mins
What is debt consolidation?
Combining multiple debts into one single loan
Increasing your credit limit
Paying off only the minimum payment
Defaulting on a loan
What is credit utilization ratio?
The amount of cash in your bank account
The percentage of your available credit that you are using
The number of credit cards you own
The interest rate on your loan
What is a cosigner?
Someone who pays your bills for you
Someone who agrees to repay a loan if the borrower cannot
A person who lends you money
A credit bureau employee
What is an installment loan?
A loan paid back in regular, fixed payments
A loan with no repayment schedule
A loan that can be used repeatedly
A loan with variable interest rates
What is revolving credit?
Credit that is paid off in one lump sum
Credit that can be used repeatedly up to a certain limit
Credit that requires collateral
Credit with no interest
What is an unsecured loan?
A loan backed by collateral
A loan not backed by collateral
A loan with a cosigner
A loan with a fixed interest rate
What is a secured loan?
A loan not backed by collateral
A loan backed by collateral
A loan with no interest
A loan with a cosigner
What is debt-to-income ratio?
The ratio of your total debt payments to your total income
The ratio of your savings to your income
The ratio of your credit limit to your income
The ratio of your expenses to your income
What is a creditor?
A person who borrows money
A person or institution that lends money
A person who cosigns a loan
A person who manages credit bureaus
What is interest?
The amount borrowed from a lender
The cost of borrowing money, usually expressed as a percentage
The total amount of debt owed
The minimum payment required
What does it mean to default on a loan?
To pay off a loan early
To fail to repay a loan as agreed
To increase your loan amount
To consolidate your loans
What is a grace period?
The time before a loan is approved
The time period when no late fee or interest is charged
The time when interest is charged
The time when a loan is in default
What are finance charges?
Fees for opening a bank account
The total cost of borrowing, including interest and fees
The amount of money borrowed
The minimum payment required
What is a credit bureau?
An agency that collects and maintains credit information
A bank that issues credit cards
A company that lends money
A government agency that regulates loans
What is APR (Annual Percentage Rate)?
The total amount borrowed
The yearly cost of borrowing money, including fees
The minimum payment required
The amount of interest paid monthly
What is a debit card?
A card that allows you to borrow money
A card that withdraws money directly from your bank account
A card that increases your credit score
A card that charges interest
What are late fees?
Fees charged for paying a bill after the due date
Fees for opening a credit card
Fees for using a debit card
Fees for consolidating debt
What is a minimum payment?
The smallest amount you must pay on a credit card bill to avoid penalties
The total amount owed on a credit card
The amount of interest charged
The amount borrowed
What is bankruptcy?
A way to increase your credit score
A legal process for people who cannot repay their debts
A type of loan
A fee charged by creditors
What is collateral?
Money borrowed from a lender
An asset pledged to secure a loan
The interest rate on a loan
The minimum payment required
What is a loan?
Money borrowed that must be repaid, usually with interest
Money given as a gift
Money earned from investments
Money paid as a fee
What is a credit card?
A card that allows you to borrow money up to a certain limit
A card that withdraws money from your savings account
A card that increases your income
A card that charges no interest
What is debt?
Money owed to others
Money saved in a bank account
Money earned from a job
Money given as a gift
What is a credit limit?
The maximum amount you can borrow on a credit card
The minimum payment required
The total amount of debt owed
The interest rate on a loan
What is a credit score?
A number that represents your creditworthiness
The amount of money in your bank account
The total amount of debt owed
The interest rate on a loan
What is foreclosure?
The process of taking possession of a property when the borrower fails to repay a loan
The process of consolidating debt
The process of increasing your credit limit
The process of paying off a loan early
What is a credit report?
A summary of your credit history and activity
A summary of your bank account balance
A summary of your income
A summary of your investments
What is credit?
The ability to borrow money and pay it back later
The amount of money in your savings account
The amount of money you earn from a job
The amount of money you owe
What is a borrower?
A person who lends money
A person who receives money and agrees to pay it back
A person who manages credit bureaus
A person who cosigns a loan
What is a mortgage?
A loan used to buy real estate, usually secured by the property
A loan used to buy a car
A loan with no interest
A loan with a cosigner
