Credit and Credit Cards - Financial Management

This set of flashcards covers key concepts related to credit and credit cards, including definitions of different types of credit, the importance of credit scores, and the benefits and drawbacks of credit cards.

Installment Credit

A type of credit that allows you to borrow a lump sum and pay it back in fixed amounts.

Revolving Credit

A type of credit that provides ongoing access to a line of credit that can be borrowed from as needed.

Credit History

A record of your past borrowing and repaying behavior.

Credit Score

A numerical expression of your creditworthiness, typically ranging from 300 to 850.

FICO® Score

A credit score developed by Fair Isaac Corporation that assesses your credit behavior.

Annual Credit Report

A report that gives you a summary of your credit history for free, available once a year.

Good Credit

Credit that allows you to access loans with favorable terms, such as lower interest rates.

Bad Credit

Credit that indicates a higher risk to lenders and may result in higher interest rates or denial of credit.

APR (Annual Percentage Rate)

The interest charged on a credit card, expressed as a yearly rate.

Credit Limit

The maximum amount of credit that a lender will extend to a borrower.