Section 5 Personal Finance Study Question Answers Essay

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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

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