Fool Proof Final Exam Study Guide

Fool Proof Final Exam Study GuideCredit - Answer-An arrangement to receive cash, goods, or services now and pay for them in the future. Credit Report - Answer-a report on a person's creditworthiness that includes identifying information, credit cards, late payments, bankruptcies, and savings balances Credit Score - Answer-a number assigned to a person that indicates to lenders their capacity to repay a loan. Rights concerning checking your credit - Answer-- Consumers in all states have the right to a free annual credit report from each of the three major CRAs - you can pay to check it otherwise (about $20) 5 Factors that affect your credit score - Answer-- Your history of payment on all types of accounts - The amount of money you owe. - How long you've had credit. - How much debt you've taken on recently. - What kinds of credit you have. Interest - Answer-A sum paid or charged for the use of money or for borrowing money Loan - Answer-An amount of money given to the borrower for a set period of time. After the set time has passed, the money must be paid back plus the lending fee, called interest. Payments are normally made over a series of months. Annual Percentage Rate (APR) - Answer-Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan interest and principal - Answer-The price charged for borrowing money Why paying the minimum balance on a credit card is dangerous - Answer-By paying the minimum balance on a credit card with high interest rates, you are further delaying payment while racking up new charges for every month your balance is not paid in full. Grace p