Finance U8 Credit
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24 Terms
Installment Loans
Used to finance a specific purchase for a specific amount of time.
Closed-end Credit
Revolving Credit
Used for any purchase as long as you’re under the credit limit.
Open-end Credit
Secured Debt
Debt that is tied to a specific asset that can be used as collateral and repossessed.
Closed-end Credit
Unsecured Debt
Debt that is not tied to a specific asset; no collateral that can be repossessed.
Open-end Credit
Fixed Rate
Terms of this credit remain constant during the life of the loan.
Closed-end Credit
Variable Rate
Terms of this credit vary during the life of the loan.
Open-end Credit
Installment Loans
Secured Debt
Fixed Rate
Ex. Car Loans, mortgage, student loan (unsecured)
Closed-end Credit
Revolving Credit
Unsecured Debt
Variable rate
Ex. Credit Cards
Open-end Credit
Revolving Credit
Unsecured Debt
Ex. Phone bill, gas, electric, water, all utilities
Service Credit
The Schumer Box
Credit Card Agreement formally known as?
Debtor
The person who borrows money from another
Creditor
A person or business that loans money to others
Credit
The use of someone else’s money, borrowed borrowed now with the agreement to pay it back later.
Collateral
Property pledged to assure repayment of a loan
Balance Transfer
The use of one credit card to pay the balance on another credit card
Capital
The value of property you possess after deducting your debts
Credit bureau
A credit repot is issued by
Account detail - installment or revolving, amount, rate, etc.
Personal information
Public record information
Credit information - new/old loans
Requests for credit history - who looked at your file
Credit report contain:
781-850
FICO score Excellent
721-780
FICO score Good
661-720
FICO score Fair
601-660
FICO score Poor
300-600
FICO score Very Poor
Pay bill son time
Improve payment history
Keep balances low on credit cards and revolving credit
Pay off debt rather than moving it around
Open accounts slowly - not several at a time
Ways to fix credit score