Managing Credit Unit Review
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This set of flashcards covers key vocabulary and concepts related to managing credit and debt, important for understanding personal finance.
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17 Terms
Debt Snowball Method
A strategy for paying off debts by focusing on the smallest balances first.
Credit Report
A detailed report of an individual's credit history used by lenders to assess creditworthiness.
Credit Score
A 3-digit number that summarizes an individual's credit risk based on credit history.
Authorized User
A person who is added to another's credit card account, allowing them to use the card while building their credit history.
Credit History
The record of a borrower's repayment of debts, detailing how reliably they have managed loans.
Credit Utilization Rate
The ratio of current credit card balances to credit limits, an important factor in credit scoring.
Thin File
A credit report that contains very little credit history, making it difficult for lenders to evaluate a borrower.
Payment History
A record of on-time or late payments made on debts, significantly influencing a credit score.
Consumer Financial Protection Bureau (CFPB)
A government agency that ensures consumer protections for financial products and services.
Credit Bureau
An organization that collects and maintains individual credit information and provides it to lenders.
Bankruptcy
A legal process to address insolvency, allowing individuals to discharge certain debts.
Annual Percentage Rate (APR)
The annual rate charged for borrowing or earned through an investment, expressed as a percentage.
FICO Score
A specific type of credit score that lenders use to evaluate credit risk.
Soft Inquiry
A check of a person's credit that does not affect their credit score.
Hard Inquiry
A check of a person's credit that may impact their credit score temporarily.
Repossession
The act of taking back property by the lender or seller when a buyer defaults on payments.
Interest Rate
The amount charged by lenders for borrowing money, usually expressed as a percentage of the principal.
Note 
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