Section 5 Personal Finance Study Question Answers

Name __David Crisp______4/15/2015____________________________Section 5 Study Questions (9.0 points)

Answer each question fully. Complete sentences are not necessary.

Lesson 1 (3.0 points)

1. What is credit? (0.5 points)
Credit is commitment to pay for something in the future, instead of paying for it right away.

2. What is a credit score? (0.5 points)
A number that tells lenders how likely you are to make payments on time.
3. What is installment credit? (0.5 points)
Installment credit is when you borrow a specific amount and agree to pay it in a specific number of payments of equal amounts.
4. What is revolving credit? (0.5 points)
Revolving credit is when you are approved for borrowing up to a specific credit limit you can choose how much of that credit to use and when to pay it off.
5. What is non installment credit? (0.5 points)
Non-installment credit is credit that is paid all at once, in a single payment.
6. Name at least one section of a credit report. (0.5 points)
Inquiries
Lesson 2 (3.0 points)

1. Name at least one of the steps in establishing credit. (0.5 points)
Open a Bank account
2. Name at least one alternate option to establishing credit if you are unable to get a credit card yet. (0.5 points)
Getting a department store or gas cards
3. What is debt services default? (0.5 points)
Debt services default is the failure to make a payment, such as a scheduled mortgage payment or the finance charge on a credit.
4. What is the Better Business Bureau? (0.5 points)
The Better Business Bureau is an organization that reports on the reliability and ethics of companies and other organizations.
5. What is a debt settlement program? (0.5 points)
A debt management plan allows the credit counseling service to be involved with the day to day aspects of managing your debt.
6. What is bankruptcy? (0.5 points)
Bankruptcy is the