What Is Credit?

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1. What is credit? (0.5 points) The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future. 2. What is a credit score? (0.5 points) A number assigned to a person that indicates to lenders their capacity to repay a loan. 3. What is installment credit? (0.5 points) Traditional consumer loans, originated and serviced locally, and repaid over time by regular payments of principal and interest. 4. What is revolving credit? (0.5 points) Credit that is automatically renewed as debts are paid off. 5. What is noninstallment credit? (0.5 points) Traditional consumer loans, originated and serviced locally, and repaid over time by regular payments of principal and interest. 6. Name at least one section of a credit report. (0.5 points) The accounts tab. Lesson 2 (3.0 points) 1. Name at least one of the steps in establishing credit. (0.5 points) Having a cell phone bill and paying it all on time will help you establish your credit. 2. Name at least one alternate option to establishing credit if you are unable to get a credit card yet. (0.5 points) Gas cards. 3. What is debt services default? (0.5 point. The failure to make a payment. 4. What is the Better Business Bureau? (0.5 points) A organization that reports on the reliability and ethics of companies and other organizations. 5. What is a debt settlement program? (0.5 points) A program that claims they can get you out of debt by negotiating your debt at a much lower amounts and works out a payment plan for your creditors. 6. What is bankruptcy? (0.5 points) Bankruptcy is the inability to pay back your creditors. Lesson 3 (3.0 points) 1. What is an annual percentage rate? (0.5 points) An annual interest rate that doesn’t take into account compounding that

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