Credit Protection Overview chapter 9

These flashcards cover key vocabulary and concepts related to credit protection, including credit ratings, reports, scores, and identity theft.

Credit Rating

An assessment of the creditworthiness of a borrower, reflecting their ability to repay borrowed funds.

Installment Payment Plans

Payment methods that allow consumers to pay for goods over time, often used for durable goods.

Credit Reporting Agencies

Organizations that collect and maintain consumer credit information; the three major ones are Experian, Equifax, and TransUnion.

Credit Report

A detailed report of an individual's credit history, including personal information and credit account information.

FICO Score

A credit score that measures a person's credit risk based on their credit report, used by lenders to determine credit eligibility.

VantageScore

A credit scoring model developed by major credit bureaus to provide a more consistent evaluation of credit risk among borrowers.

Collateral

An asset that a borrower offers to a lender to secure a loan, which can be claimed by the lender if the loan is not repaid.

Secured Credit Card

A credit card backed by a cash deposit from the cardholder, often used by those establishing or rebuilding credit.

Identity Theft

The act of stealing someone's personal information to commit fraud or other crimes.

Fraud Alert

A notice placed on a credit report to warn potential creditors to verify the identity of the applicant before extending credit.

Chip and Pin Technology

A security feature in credit cards that includes a microchip and a personal identification number for transaction approval.

Consumer Spending

Expenditures by individuals and households on goods and services, a significant component of GDP growth.

Credit Utilization

The ratio of a borrower's current credit debt to their total available credit, an important factor in credit scoring.

Delinquency Information

Details in a credit report about late payments or defaults on credit accounts.

SCAM (acronym)

A method to avoid identity theft; stands for Stingy, Check, Ask, Maintain.

Unexplainable Bank Withdrawals

A potential sign of identity theft, where unrecognized amounts are withdrawn from a victim's account.