Personal Finance Ch 17
Credit Records and Laws
Terms in this set (28)
The complete record of your borrowing and repayment performance.
A business that gathers, stores, and sell credit information to other businesses.
Credit guard services
A company that monitors your credit files at the three credit bureaus.
A consumer request that requires the credit bureaus to deny all access to a consumer's credit information or files.
Businesses that provide information to credit bureaus and pay a monthly fee to the credit bureaus for access to the information.
Means that a person meets the basic qualifications for receiving credit.
A responsible attitude toward honoring obligations, often judged on evidence in the person's credit history.
The financial ability to repay a loan with present income.
The financial assets you possess that are worth more than your debts. Assets - Liabilities = Capital
External conditions that affect your ability to repay a debt.
Property pledged to assure repayment of a loan.
Someone who promises to pay if the borrower fails to pay.
A measure of creditworthiness based on an analysis of your credit and financial history.
A customer pays bills before the due dates.
A customer pays bills on the due date or within a ten-day grace.
Fair credit rating
A customer who usually pays all bills within the grace period, but occasionally takes longer.
Poor credit rating
A customer is usually denied credit because their payments are not regular.
Based on factors such as amount of current debt, number of late payments, number and types of open accounts, current employment, and current income.
Tells potential creditors the likelihood that you will repay debt as agreed.
FICO (Fair Isaac and Company) scores
Credit scores most lenders use to determine credit risk.
Consumer Credit Protection Act
Requires lenders to fully inform consumers about all costs of a credit purchase before an agreement is signed. AKA Truth-in-Lending Law.
Fair Credit Reporting Act
The right to know what is in your file and who has seen your file.
Fair Credit Billing Act
Creditors must resolve billing errors within a specified period of time.
An itemized bill showing charges, credits, and payments posted to your account during a billing period.
Equal Credit Opportunity Act
Prevents discrimination in the evaluation of creditworthiness.
Treating people differently based on prejudice rather than individual merit.
Fair Debt Collection Practices Act
Designed to eliminate abusive collection practices by debt collectors.
A person or company hired by a creditor to collect the overdue balance on an account.