16 terms

Managing Credit

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Annual Percentage Rate (APR)
The interest rate a credit card user will be charged on the unpaid portion of their balance
Bankruptcy
A legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay
Collections
Attempted recovery of a past-due credit obligation or debt by a collection department or agency
Credit
An agreement in which a borrower receives something of value now and agrees to repay the lender in the future, generally with interest
Credit Bureau
A company that collects and sells information about how individual people manage their credit (e.g. Equifax)
Credit Counselor
A certified financial advisor who works for an accredited nonprofit specializing in helping consumers repay debt in a responsible manner
Credit History
A record of a person's use of credit over time; your credit history plays an important role in determining your credit score
Credit Report
A document containing an individual's financial information focusing on payment of their credit obligations over time
Credit Score
A three-digit number (ranging from 300-850) based on an individual's credit history detailed in a credit report
Credit Utilization Rate
A measurement of your outstanding debt divided by your total available credit
Debt Snowball Method
A method of debt repayment whereby the borrower prioritizes paying down debts with the smallest balances first
Default
Long-term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower's credit score
FICO Score
The most commonly used credit score
High Rate Method
A method of debt repayment whereby the borrower prioritizes paying down debts with the highest interest rates first
Net Worth
A measurement of your assets (money you've saved or things of value you own) minus your liabilities (money you owe others); also called wealth
Thin File
A term used to describe someone with little to no credit history
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