CREDIT REVIEWSpring 2014

Annual Percentage Rate•Cost of credit expressed as a yearly percentage

Credit Limit•The maximum amount of charges allowed to an account.

Interest•The charge for borrowing money

Credit•Receipt of money to buy good or services in the present with the promise to pay for them in the future.

Revolving Credit•Pre-approved credit up to a certain limit that you can use at any time.

Secured Loan•This backed up by collateral and the collateral can be the item you are purchasing

Cosigner•A person besides the borrower who signs a credit agreement and is legally obligated to repay the loan if the borrow does not make payments.

Character•Having good or bad payment history

Installment Credit•Borrowing a set amount with equal monthly payments

Capacity to Pay•Stable job history and having the ability to pay for the item you purchases

Condition•Adverse changes to the industry you work in, adverse property changes, pending lawsuits are all example of ???

Annual Fee•Fee charge once a year for credit card ownership

Truth in Lending Act•This states: the cardholder is only liable up to $50 if the card is stolen; if the number is stolen (but not the card) the cardholder has $0 liability and states the cardholder must submit a letter within 60 days of fraud.

Collateral•Having something of value that can be sold or used to help pay off a debt i.e. house, art, jewelry

Credit Score•A number that summarizes an individuals’ credit history

Due Date•Date the payment is due

Credit Report•A record of a consumer’s credit history

Capital•Savings, investments, IRA, 401 K plan, are examples of things which are liquid and can be accessed to pay off debt.

Bankruptcy•Not having enough income to pay for all of your expenses and being in debt to the point of never being able to pay.

•Remains on your credit for 10 years

Finance Charge•Charges to a credit card when you do not pay the full amount due on your bill.

Minimum Payment•Smallest amount that can be paid on a credit payment

Credit Reporting Agency•The best place for a consumer to acquire a credit report and this can be done 1 time per year per agency.

Credit Worthiness•Checking someone’s credit history helps a lender determine their ____________.

Late Payment Fee•Fee charged when the payment made is not made by the due date

Additional things to look at…• Advantages and Disadvantages of Credit• Review vocabulary • Credit Card Safety Tips• Debit and Credit Cards (Differences & Similarities)• Credit Scores (effect to you – and how you affect it)