Credit Cards, Statements, Reports, & Scores Review

Credit Cards Use How Credit Cards Work to answer these questions.
1. What items do lenders consider when giving you a credit card (or loan)?
Past credit history, credit score, amount of income being made.
2. How do you win the credit game and get a good credit score? (p.12)

3. How is a credit card a loan? (p.15-16)
A credit card is a loan because you have to pay back all the money you borrow.

4. What is an APR? (p.16-17)
An APR is the Annual Percentage Rate
5. What happens if you only pay the minimum each month? (p.17)
If you only pay the minimum each month you will be paying the credit card off for a longer amount of time.

6. What is the difference between a regular APR and an introductory rate? (p23)
The introductory rate may be a fixed annual percentage rate (APR) and after the introductory period ends, the
rate may become variable and change depending
7. What are some things credit cards issuers charge fees for? (p.25)
Late payments, overdraft fees and annual fees.
8. What is a grace period? (p.26)
The period between the end of a billing cycle and the date your payment is due is referred to
9. What happens if you pay your bill on time? (p.29)
You build a good credit score over time.
10. What happens if you pay your bill late? (p.30)
You get billed by the credit card company and develop bad credit.
11. What should you do if you lose your card or somebody steals it? (p.32)
Report to the theft or loss to the credit card company and have it voided.
12. What are 3 things you can do to be smart with your credit card? (p.35-37)
Pay your bills on time, dont make purchases you will not be able to pay, develop good credit by purchasing small
items.
Credit Card Statements Use Reading A Credit Card Statement to answer these questions.
13. What information appears in the Summary of Account Activity?
A summary of the transactions on your accountyour payments, credits, purchases, balance transfers,
cash advances, fees, interest charges, and amounts past due.
14. This example shows the person has used $1,786.00 of a $2,000 credit line. Is this a good or bad thing to do? Explain.
Its not the best thing to do but its not the worst, as long as you have a high enough paying job to pay the bill.
15. In general, what are some common ways to pay your credit card bill? Can you pay it with the same credit card if you
have some available credit remaining?
No you cannot pay the credit card bill with your credit card. Some common ways to pay your credit card bill is by
cash through the mail or certified check.
16. What happens if your payment due date falls on a weekend?
The payment is considered on time if it arrives by 5 p.m. on the next business day.

17. Does the late payment warning appearing on your card mean that your payment is actually late?
This section states any additional fees and the higher interest rate that may be charged if your payment is late.
18. How far in advance must a credit card company notify you of changes in your interest rates?
The credit card company must tell you at least 45 days before your rates change.
19. Why does the statement list all of your transactions?
This is the section of your statement where you can check for unauthorized transactions or other problems.
20. Why must credit card companies list fees on your monthly bill?
They must list the fees on your monthly bill so you are not billed without proper notification.
21. How can you avoid certain fees?
You can avoid certain fees by not making late payments, not going over your credit limit etc.
22. What information is in the Interest Charge Calculation section?
A summary of the interest rates on the different types of transactions, account balances, the amount of each, and
the interest charged for each type of transaction.
Credit Reports Use Understanding Credit Reports (and your brain!) to answer these questions.
23. What is credit?
Credit is when goods, services, and/or money are received in exchange for a promise to pay back a denite sum of
money at a future date.
24. What is the difference between a lender and a borrower?
A lender is the person or organization who has the resources to provide the individual with a loan. The borrower
is usually expected to pay interest in addition to the amount borrowed
25. What is a credit report?
A credit report is a record of a consumers credit history
26. What is credit history?
Credit history is a record of transactions involving the use of credit.
27. What are the three credit reporting agencies?
Equifax, Experian, and TransUnion.
28. Of the ones listed, which 3 lenders who report consumer credit transactions to the credit reporting agencies do you
think will report your information within the next 5 years? (I.E. do you think youll get a retail card? Mortgage? Cell
Phone in your name?)
I believe Equifax will be the credit reporting agency I will report to.
29. Summarize what information is in the following on a credit report
a. Personal Information;
Name and aliases, current and past addresses, Social Security Number, date of birth, and employment
history.
b. Accounts Summary;
Types of accounts, date the account was opened, credit limit or loan amount, account balance, and
payment history, including missed or late payments.
c. Public Record Items;
Accounts turned over to collection agencies, and public record information such as bankruptcy, tax
liens, legal suits, and foreclosures.
d. Credit Inquiries;
A request for an individuals credit report. Inquiries are completed by a variety of businesses that
have a purpose to view a consumers credit report, such as insurance agencies, current and potential
credit companies, nancial institutions, landlords, potential employers.
30. What is the difference between a soft and hard credit check?
Soft credit checks are inquiries such as those that result when consumers check their own credit report; credit
card companies pre-approve consumers for a line of credit, or pre-employment checks. These do not aect an
individuals score. Hard credit checks occur when the consumer gives permission to a company to check their
credit usually when seeking additional credit. For example if an individual applies for a new credit card,
automobile loan, insurance, or opens a new cell phone account, these usually aect the credit score.
31. What is a credit score?
A credit score is a mathematical tool created to help a lender evaluate the risk associated with lending a customer
money
32. Using the example chart of 30-year fixed mortgages, how does your credit score affect your interest rate and
monthly payment?
This is based upon a 30 year fixed mortgage rate for a $300,000 loan
FICO Score Interest Rate Monthly Payment 30 Year Amount
760 5.9% $1,787 $643,320
650 7.2% $2,047 $736,920
590 9.3% $2,500 $900,000

33. What 5 things are used to calculate your credit score?
- Pursuit of new credit
-Length of Credit history
-Outstanding debt
- Payment history
- Types of credit in use
34. What information is not used to calculate your credit score?
Race, color, religion, national origin, sex and marital status
35. What are the 4 positive credit behaviors?
Pay bills consistently and on time
Maintain reasonable amounts of unused credit
Apply for credit sparingly, thus keeping credit inquiries to a minimum
Check credit reports annually and search for errors
36. What are the 3 negative credit behaviors?
Routinely paying late on credit cards, utility and cell phone bills
Maxing out limits on credit cards
Numerous credit applications in a short period of time
37. What are 3 steps you can take to start building a credit history?
Not having any credit accounts in own name
Paying cash for all major purchases
paying phone and utility bills on time (they are only reported if an individual does not pay)
Credit Scores Use FICO Credit Scores to answer these questions.
38. What is a credit score?
A credit score is a mathematical tool created to help a lender evaluate the risk associated with lending a
customer money
39. Why is your credit score important?
Credit scores affect whether you can get credit and what you pay for credit cards, auto loans, mortgages and
other types of loans.
40. What is the range of FICO scores?
300-850
41. What might happen if your score is below 600?
Lenders may charge you a higher rate or deny your credit application
42. How many credit scores can a person have?
3
43. What are 3 ways to improve your credit score?
Do not make late payments, go past the credit limit and make purchases you can repay.
44. Why is improving your score beneficial?
It allows your application to be accepted for loans, credit cards, mortgage rates etc.
45. Where do you get your free annual credit report?
nationalcreditreport.com