Credit Chapter - Resource Mgmt

Sales credit

Services and goods in promise to pay later

Revolving Credit

Charge up to credit limit (30 days)

Installment Credit

Larger items in equal amount till paid off

Secured Loan

When borrowing you pledge collateral

Unsecured Loan

A promise or a signature when borrowing money

Capacity

Income and expenses

Character

Stability + credit history

Capital

What they can take if you don’t pay

3 C’s

How credit is granted and what creditors go through to see if you are eligible.

Major credit agencies

TransUnion, Equifax, Experian

FICO

Most common type of credit scoring system

300-850.

Credit score

point system that tracks your credit

Credit report

A card with everything revolving your credit on it.

Kinda like a ___ card you get from school

Truth in Lending

Creditors must provide clear, accurate terms in a form you can keep

Equal Opportunity Act

Balance between creditors rights and consumers fears

Fair Credit Reporting Act

Consumers that made past mistakes have the opportunity to fix rating

Fair Credit Billing Act

Outlines billing errors + disputes

Fair Debt Collection Practices Act

Protects consumers from collectors that engage in unfair, abusive behaviors

What can a creditor do?

• Require collateral, higher down payments, or close/change accounts if unable to pay due to age.

Who can obtain info from credit agencies?

• Legitimate businesses

• Creditors granting credit

• Employers

• Certain gov. agencies

What Debt collectors CANNOT do?

• Send cards you didn’t ask

• Require a co-sign

• Deny or close or make you reapply because of age

Creditors cannot discriminate on..

• Age/Sex

• Marital Status

• Race

• Religion

• Public Assistance Income

• Info about Spouse (unless joint credit)