Flashcards in Good Credit Deck (15):
List some positive uses of credit
Obtain loans at favorable rates, convenience, emergencies, own expensive products sooner, obtain an education
List some negative uses of credit
Tempting to spend more money, reduces financial flexibility and buying power, buying costly items on credit that you can't afford, interest is costly
Annual percentage rate
What is a debt limit?
Overall maximum you believe you should owe based on your ability to meet repayment obligations. Debt-to-income method or Debt Payments to Disposable Income method.
What is the purpose of usury law?
Establishes maximum loan amounts, interest rates, and credit-related fees for different types of small loans from various sources.
What is a loan used to pay off all other debits and reduce the total monthly payments?
Debt Consolidation loan
Summarize Fair Credit Reporting Act
Credit reports must only contain accurate information. It allows consumers to correct or challenge errors or omissions. Regulates consumer reporting agencies.
Fair Credit Billing Act
Protects consumers from unfair billing practices and provides mechanisms for addressing billing errors.
Equal Credit Opportunity Act
Creditors can't discriminate against any applicant. If you are denied credit, they must give you a written explanation of the reasons for denial.
Credit Card Act
To establish fair and transparent practices relating to the extension of credit. Must give notice of rate increases, can't market excessively to young people. Notice of payment terms.
What do you call an arrangement whereby you provide one monthly payment to a credit counseling agency which then distributes funds to all of your creditors?
Debt Management Plan
How can you prevent unauthorized credit accounts from being opened in your name?
Place a security freeze on your credit
What expresses cost of credit as a percentage rate?
APR - Annual Percentage Rate
Which Act prohibits third-party debt collection agencies from using abusive, deceptive, or unfair practices to collect past-due debts?
Fair Debt Collections Practices Act