10 Points Question- What is the definition of Character?

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Presentation transcript:

10 Points Question- What is the definition of Character?

10 Points Answer- Character is considered a persons Credit reputation. They pay their bills on time and have a excellent credit rating. The loan officer will look at a person’s credit report to verify

20 Points Question- What is Capacity?

20 Points Answer- Capacity is a person’s ability to make money. Do they have a job? Is it stable? How much money do they make?

30 Points Question- What is Capital?

30 Points Answer- Capital is the amount of money (liquid assets) a person has available.

40 Points Question- What are the 3 C’s used for?

40 Points Answer- Determining whether a bank or other business will loan a person money and determine their credit worthiness.

50 Points Question- What is collateral?

50 Points Answer- An asset that is used to back up a loan. Example- car for the car loan House for a mortgage

10 Points Question- What does APR stand for?

10 Points Answer- Annual Percentage Rate

20 Points Question- Why is having a credit card a good idea?

20 Points Answer- A credit card is convenient and useful way to pay for goods and services. With a credit card you can… Use in emergencies Buy airline tickets Buy on-line merchandise

30 Points Question- What is the biggest pitfall of credit cards?

30 Points Answer- Only paying the minimum payment. Buying more than what you can afford.

40 Points Question- What are the costs/fees associated with a credit card?

40 Points Answer- Annual Fee Interest Charges Late Fees

50 Points Question- What is the definition of cash advance?

50 Points Answer- When you take cash out of your credit card.

10 Points Question- What is credit limit?

10 Points Answer- The maximum balance you can have on a credit card.

20 Points Question- What is the grace period?

20 Points Answer- Period of time you have to pay the balance before interest is charged.

30 Points Question- What is the annual fee?

30 Points Answer- The yearly cost of owning the credit card.

40 Points Question- What is an over-the-credit-limit fee? Yikes!!!!

40 Points Answer- The credit card company will charge you a fee when you go over the limit and will continue to charge your account until you get the balance below your credit limit.

50 Points Question- What is a variable interest rate on a credit card? How is it determined?

50 Points Answer- Variable interest rate means it can change at any time. The way it is determined is by taking the prime rate (determined by the Federal Reserve) and adding a percentage (Bank Profit)to that % 12.9 % 22.9%

10 Points Question- Who are the main 3 credit bureaus that all companies report to? 3

10 Points Answer- Experian Trans Union Equifax

20 Points Question- What did the new Federal Law provide consumers regarding credit reports?

20 Points Answer- You can request and receive a free credit report each year.

30 Points Question- What do you do when you find an error on your credit report

30 Points Answer- You must write a letter to each credit bureau and explain the error and include any documentation that will prove your case. You should also include a copy of the credit report highlighting the error.

40 Points Question- What is the Fair Credit Billing Act?

40 Points Answer Federal Law that requires all companies to correct errors promptly and without damage to your credit.

50 Points Question- Identify 5 pieces of information located on a credit report.

50 Points Answer- Personal Information  Social Security  Employment  Addresses Public Records Account History  Paid on time  Credit Limit  Date Opened Credit Inquiries

10 Points Question- What is the finance charge on a credit card or loan and what is it comprised of?

10 Points Answer- The charge for the loan or credit card, comprised of interest and fees.

20 Points Question- What is a Introductory rate?

20 Points Answer- It is below-market interest rate offered to entice customers to switch credit cards or lenders

30 Points Question- What is a co-signer?

30 Points Answer- Person who pledges in writing as part of a credit contract to repay the debt if the borrower fails to do so. The account displays on both the borrower’s and the co-signer’s credit reports.

40 Points Question- What is installment credit and give an example?

40 Points Answer- Credit accounts in which the debt is divided into amounts to be paid successively at specified intervals. Examples are car loans and house payments.

50 Points Question- What is unsecured credit? What is secured credit? Give examples of both.

50 Points Answer- Unsecured Credit Credit for which no collateral has been pledged. Loans made under this arrangement are sometimes called signature loans; in other words, a loan is granted based on signing an agreement that the loan amount will be paid. Example: Credit Cards Secured Credit Loan for which some form of acceptable collateral, such as a house or automobile has been pledged

10 Points Question- What is a credit score?

10 Points Answer- A credit score provides a “snapshot” of your credit risk at a particular point in time. Lenders, insurers, landlords, employers and utility companies use your credit score to determine if you qualify for a loan, and at what interest rate and credit limit.

20 Points Question- What is the most common term used for Credit Score?

20 Points Answer- FICO Score-determined by Fair Isaac Company

30 Points Question- What are the 5 parts of your credit score?

30 Points Answer- Payment History – On time – Late payments – Any Bankruptcy Outstanding Debt – How much you owe Length of Credit History – How long have you had credit New Credit Other Factors

40 Points Question- What can you do to boost your credit score? – Name at least 3.

40 Points Answer- Pay your bills on time. Delinquent payments and collections can really hurt your score. Keep balances low on credit cards. High debt levels can hurt your score. Pay off debt rather than moving it between credit cards. The most effective way to improve your score in this area is to pay down your revolving credit. Apply for and open new credit accounts only when you need them. Check your credit report regularly for accuracy and contact the creditor and credit reporting agency to correct any errors. If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score.

50 Points Question- What can FICO scores range from? Identify a good credit score number. What can a good credit score do for you?

50 Points Answer Most people score between 600 & and above is a good score Lower your interest rates Speed up credit approvals Reduce deposits required by utilities Get approved for apartments Get better credit card, auto loan and mortgage

References rules/your-credit-history/how-to-read-your-credit-report.html rules/your-credit-history/how-to-read-your-credit-report.html mistakes-on-your-credit-report.aspx mistakes-on-your-credit-report.aspx