ch 15 Consumer Credit
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Last updated 1:28 PM on 1/25/23
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20 Terms
1
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annual percentage rate (APR)
cost of credit on a yearly basis, expressed as a percentage
2
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bankruptcy
legal process in which some or all of the assets of a debtor are distributed among creditors because the debtor is unable to pay his or her debts
3
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closed-end credit
credit as a one-time loan that is paid back over a specified period of time in payments of equal amounts
4
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collateral
a form of security that helps guarantee that the creditor will be repaid
5
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consumer credit
use of credit for personal needs
6
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cosigning
agreeing to take responsibility for loan payments if the other person fails to make them
7
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credit
an arrangement to receive cash, goods, or services now and pay for them in the future
8
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credit bureau
credit reporting agency (CRA) is a company that collects information about where you live and work, how you pay your bills, whether or not you have been sued, arrested, or filed for bankruptcy.
9
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creditor
an entity that lends money
10
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credit rating
a measure of a person’s ability and willingness to make credit payments on time
11
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credit report
The individual records of consumer financial behavior kept by credit bureaus and provided to businesses when they want to evaluate potential borrowers.
12
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FICO score
A specific credit score developed by Fair Isaac Corporation
13
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finance charge
total dollar amount paid to use credit
14
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grace period
time period during which no finance charges will be added to an account
15
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identity theft
the illegal use of someone else's personal information (such as a Social Security number) especially in order to obtain money or credit.
16
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line of credit
maximum amount of money a creditor will allow a credit user to borrow
17
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minimum monthly payment
smallest amount that one can pay and remain a borrower in good standing
18
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net income
income received from take-home pay, allowance, gifts, and interests
19
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open-end credit
credit as a loan with a certain limit on the amount of money that can be borrowed for a variety of goods and services
20
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simple interest
interest computed only on the principal
