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credit

Terms in this set (22)

credit
the ability of a consumer to obtain goods or services before payment with the trust that the payment will be made in the future
three C's of credit
capital, character, capacity
most important of the three C's
character
truth in lending act
requires creditors to tell consumers what credit will cost them before they use it, makes consumers fully aware of credit terms before they open anything
line of credit
the amount of credit extended to a borrower
APR
the amount of interest you'll pay annually
down payment loans
mortgage, car, house
installment credit
used when you have to make a big payment, like on a house
bank issued credit card
can be used anywhere
open ended credit
pre approved amount, can be used whenever you want, interest is charged on the amount not used
closed end credit
taken out for a certain amount of time, scheduled payment and scheduled interest rate
credit score
a number that describes a person's credit history and ability to pay back loans
advantages of having good credit
lower interest rates, better insurance rates
ways to establish good credit
apply only for credit cards that you need, make sure your card is secure
the best way to maintain good credit
pay bills on time and control spending
chapter 7 bankruptcy
legal relief from paying debt that destroys your credit for 10+ years
3 major credit reporting agencies
transunion, equifax, and experion
variable APR
APR that may go up or down over the course of the year
equal credit opportunity act
requires that all consumers be treated equally when applying for credit
fair credit reporting act
requires accuracy and privacy in credit reports and gives consumers the power to request a change if something on their credit report is wrong
fixed APR
APR that stays the same all year
different ways identity theft happens
internet, phishing, dumpster diving, stealing mail
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