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23 Cards in this Set
- Front
- Back
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5 C's
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Character, Capacity, Capital, Collateral, Credit History
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debt payments-to-income ratio
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monthly debt payments (not including rent or mortgage payments) divided by monthly net income
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credit rating
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information gathered from application and credit bureau
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credit bureau
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operates for profit- accumulates, sotres, and distributes credit information- keeps credit files on individuals
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credit
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receive cash, goods, or services now and pay later
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finance charge or interest
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charge for using credit
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equal credit opportunity act
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can't be denied credit due to race, nationality, age, gender, marital status, or certain other factors
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fair credit reporting act
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regulates the use of credit reports
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closed-end credit
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one time loan that you pa back over a specified period of time- specific purpose and amount of money
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open-end credit
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borrow money for a varitye of goods and services
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line of credit
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borrow up to a max amount
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layaway
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(open-end) pay a deposit on an iten and make a regular payment until item is paid in full- don't get item til after paid
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installment load
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(closed-end) repay specific amount (principal and interest) over specific time with regular payments
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installment sales
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credit- buy item on credit and pay it off within specific period of time- regular payments or 1 payment
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down payment
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% of price paid up-front on purchase
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principal
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amount of the loan
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co-signer
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person responsible for loan if borrower doesn't pay
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wholesale value
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lowest amount your car is worth- receive this amount as trade-in
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retail value
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wholesale plus profit; someone will pay to buy car- receive this if you sell on your own
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mortgage
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loan contract to buy a home or condomunium
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fixed rate
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interest rate and payment remain the same for term of the loan (common terms 15, 20, 30 yr)
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variable rate
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rate and payment will change throughout term
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loan discount points
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% of mortgage amount paid at closing
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