Download Guided Notes - Westmoreland Central School

– STUDENT NOTES
The Basics of Credit for Consumers
The Basics of Credit for Consumers
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Used properly, credit can
________________________________________________________________
________________________________________________________________
Types of Credit
•__________________ credit encourages immediate purchases of specific
items.
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Non-installment credit is usually extended for _____________days.
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Three places that usually issue this kind of credit are
__________________, ____________________, and
______________________.
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How much of the amount must the consumer pay off?
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_____________________________________________
__________________________ is also used for specific purchases but
allows the borrower more time to repay the money
• Installment loans may_______________________________
Do installment payments make the purchases cost more?
• ____________________________________________________
• _______________________ allows consumers to borrow up to some preset
amount such as $10,000.
• True or False. They can continue to use their credit as long as they do not
exceed their credit limit. __________________
Math for Personal Finance
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Barbara borrowed $2,300 to buy some furniture and is paying 15 percent
interest a year for the loan. The terms of the loan do not require her to
pay off any of the loan balance during the first year. She only has to make
interest payments. How much interest will she pay the first year if she
does no reduce the principal of the loan?
__________________________
Advantages of Using Credit
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____________ helps you make large purchases sooner.
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A good _______________________ can make it less expensive for you to
use credit in the future
Math for Personal Finance
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Harlan used his credit card—a form of short-term credit—to charge three
tanks of gas this month. If his charges were $43.12, $51.87, and $38.35,
how much should he pay at the end of the month?
__________________________
Disadvantages of Using Credit
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It is often ____________ to get credit than it is to pay it back
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If you borrow too much money, you may have _____________________
making the payments
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Credit cards can tempt us to purchase things _____________________
when it would be wiser to save and pay for in full
Math for Personal Finance
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Sabrina charges $800 at the local sporting goods store to buy some
exercise equipment. The store offers no interest for 90 days if the balance
is paid in full, or 24 percent annually if the balance is not paid in full prior
to 90 days. How much interest will she need to pay if she lets the account
go for 91 days before paying the bill?
_______________________
Credit Rights and Consumer Credit Laws
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_____________________________ prohibits creditors, people who
provide credit, from denying credit based on gender, age, race, national
origin, religion, and martial status.
Within how many days are creditors required to notify applicants about
their credit status?
_____________
Check Your Financial IQ
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Credit is convenient and can make certain purchases possible. But credit is
costly and can lead to financial problems if used ______________________.
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What are the risks and benefits of consumer credit?
________________________________________________________________
________________________________________________________________
________________________________________________________________
Building Good Credit
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Lenders often charge ___________________ interest rates for people with
less-than-good credit.
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What is one way to build good credit?
__________________________
Your Credit History
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Each person’s credit history is collected in an
________________________________________________.
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Paying for____________, such as electricity and phone, also shows up on
your credit history.
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Failing to pay your utility bills will _____________ affect your credit history.
Credit Bureaus and Credit Scoring
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_______________________ collect credit information on individual consumers
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The three main credit bureaus are:
_________________________
_________________________
_________________________
Credit Reports
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_________________________ shows every time you have applied for credit,
whether or not you have paid your bills on time, if you have paid your credit cards
in full every month or carried a balance, and if you have paid late fees.\
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Everyone can access his or her credit report once every _____ months free of
charge.
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__________________________________________ limits the sharing of your
financial information only to firms that have a legal purpose to evaluate this
information.
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When you apply for credit, the potential creditor will study your report and
make decisions about extending ___________________ credit.
Credit Score
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_____________________ a number based on your credit history that
assesses your creditworthiness.
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Individuals with ________________ credit scores get better interest rates on
loans.
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Credit scores are calculated based on a model created by
_____________________________________________________________.
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FICO scores will be between _____ and ______.
Check Your Financial IQ
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Good credit means having a credit history that is generally free of credit
problems, such as ___________ or __________ bills.
Threats to Your Credit: Identity Theft
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___________________ occurs when someone uses your personal
information without your permission for personal gain.
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Some criminals use your personal information to establish totally new
____________________ and engage in criminal activity.
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_________________________________ occurs when someone in a public
place skims personal information to use against you by overhearing your
conversation or viewing your personal information
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True or False: Identity thieves have been known to go through a person’s
trash to gather information?
______________________
Identity Theft Tactics
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_________________ involves copying your credit card or debit card numbers
from your cards.
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_________________ occurs when someone improperly accesses your
personal information by posing as someone who needs data for one reason
or another.

_________________ is when pretexting occurs online and can include
emailing you and asking you to verify account information.

_________________ uses email viruses to redirect you from a legitimate
website to an official looking website designed to obtain your personal
information.
Protecting against and Reacting to Identity Theft

The purchase of identity theft ______________________ may also be worth
considering.
Monitor Your Credit Report

Report _________________ information to the three main credit reporting
bureaus.

The credit bureaus will contact the creditor to verify the
__________________ of information and change it if inaccurate.
Check Your Financial IQ
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What is identity theft?
Summary
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Building good credit history is important to your _______________________.
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You can obtain a ____________________________________ from any one
of the three credit bureaus to ensure that the report is accurate.
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Identity theft is one of the _______________________ growing crimes in our
country.
Key Terms and Vocabulary
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Credit
Credit bureau
Credit history
Credit limit
Credit report
Credit score
Creditor
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Isaac Corporation
Identity theft
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Installment credit
Interest
Noninstallment credit
Pharming
Phishing
Pretexting
Principal
Revolving open-end credit
Shoulder surfing
Skimming