8-9 Test study guide

Fin LIT

Credit report

A credit report is a detailed record of an individual's credit history, including information about credit accounts, payment history, outstanding debts, and public records such as bankruptcies. It is used by lenders to evaluate creditworthiness when applying for loans or credit.

Credit Guard

A service that monitors and protects against identity theft and fraud by tracking credit activity and alerting individuals to potential issues.

Credit Freeze

A security measure that restricts access to an individual's credit report, preventing new accounts from being opened in their name. This requires all Bureaus to deny all access to their credit report.

Info on a person’s credit Report

-Summary of information - positive or negative account item.
-Public Record information- Lawsuit, judgements, property sales.
-Credit information - No existing credit accounts, credit limits.
-Request for credit history
-Personal information like SSN, birth date, and full name.

Capacity

The financial ability to repay a loan using your present income

Steps To Good Credit

1. Open a savings account

2. Open a checking account

3. Open a store Credit account

4. Apply for a Major credit card

Widespread Financial distress and Recession

Happen during the great depression.

- The need for stronger government over sight to stop unethical, deception and abusive tactics by credit companies.

Differences between Poor, Fair, good, and Excellent Ratings

• Excellent rating (Grade A, Fico 720-850): Pays off loans monthly or carries low revolving debt - never misses payments.
  
  

• Good rating (Grade B, Fico 650-719): Solid payment history, pays bills on time.
  
  

• Fair rating (Grade C, Fico 575-649): Carries considerable debt, pays within the grace period, makes minimum payments.
  
  

• Poor rating (Grade D, Fico Below 575) Frequently missing payments has, uncollected debts or has filled for bankruptcy