Personal Finance - Unit 3 - Credit Scores

Credit

An arrangement to receive cash, goods, or services now and pay for them in the future.

Credit History

A summary of a person's borrowing and repayment history

Credit Score

A rating used by credit reporting companies to help lenders decide whether and/or how much credit can be extended to a borrower.

Credit Report

a report on a person's creditworthiness that includes identifying information, credit cards, late payments, bankruptcies, and savings balances

Credit Bureau

company that collects information about your credit history and sells it to lenders

Creditworthiness

a measure of your ability and willingness to repay a loan

FICO

Fair Isaac Corporation

Credit Inquiry

a lender's check of your credit rating

Installment Loan

Loan with equal number of payments of the same amount over a fixed period of time.

Revolving Credit

a type of open credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card.

Credit Utilization

The ratio of your credit card balances to credit limits. This impacts your credit score.

Payment History

A history of the payments you have made on all credit you have obtained, which affects your

credit score. Tracks such things as whether or not you pay your bills on time, whether or not you always pay at

least the minimum amount, etc.

New Credit

rated based on the number of recently opened accounts and the number of recent credit inquiries

Types of Credit

Credit card, installment loan, student loan, mortgage

Bankruptcy

A condition under which a person or corporation is declared unable to pay debts

Tradelines

refer to accounts listed on your credit reports

Thin file

A term used to describe someone with little to no credit history