Study Questions 5

Lesson 1 (3.0 points) 1. What is credit? (0.5 points) it s a commitment to pay for something in the future, instead of paying for it right away.
2. What is a credit score? (0.5 points) its a number that tells people how likely you are to make payments on time.
3. What is installment credit? (0.5 points) its when you borrow a specific amount and agree to pay it in a specific number of payments
4. What is revolving credit? (0.5 points) its when you are approved for borrowing up to a specific amount
5. What is noninstallment credit? (0.5 points) its credit that is paid all at once in a single payment
6. Name at least one section of a credit report. (0.5 points) Credit History
Lesson 2 (3.0 points) 1. Name at least one of the steps in establishing credit. (0.5 points) Opening 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 card
3. What is debt services default? (0.5 points) its the failure to make a payment.
4. What is the Better Business Bureau? (0.5 points) its an organization that reports on the reliability and ethics of companies and other organizations.
5. What is a debt settlement program? (0.5 points) It is a program that claim they can get you out of debt by negotiating your debt to a much lower amount
6. What is bankruptcy? (0.5 points) its the inability to pay back your creditors
Lesson 3 (3.0 points) 1. What is an annual percentage rate? (0.5 points) its an annual interest rate that doesn't take into account any compounding of interest that happens during that year.
2. What is an annual percentage yield? (0.5 points) its an annual interest rate that does take into account compounding that happens during that year.
3. Name at least one advantage of credit cards. (0.5 points) Building