Personal Finance

Capacity The Borrower’s financial ablility to meet credit obligations
Capital The borrower’s assets or net worth.
Character The borrower’s attitude toward his or her credit obligations.
Closed-end credit One-time loans that the borrower pays back in a specified period of time and in payments of equal amounts.
collateral A valuable asset that is pledged to ensure loan payments.
Conditions The general e conomic conditions that can affect a borrower’s ability to repay a loan.
Consumer Credit The use fo credit for peronal needs ( except a home mortgage).
Consumer Credit Reporting Reform Act Places the burden of proof for accurate credit information on the credit reporting agency.
Credit A arrgangement to recive cash, goods, or services now and pay for them in the future.
Credit Bureau A reporting agency that assembles credit and other inforamtion about consumers.
Debit Card Ellectronically subtracts the amount of a purchase from the buyer’s account at the moment the purchase is made.
Equal Credit Opportunity Act Bans discrimination in the extension of credit on the basis of race, color, age, sex, martial status, and other factors
FCBA Regulates the use of credit reports, requires the deletion of obsolete information, and gives consumers access to their files and the right to have erroneous data corrected.
Home equity loan A loan based on the current market value of home less the amount still owed on the mortgage.
Interest A periodic charge for the use of credit.
Line of Credit The dollar amount, which may or may not be borrowed, that a lender makes available to a borrower.
Open-end Credit A line of credit in which loans are made on a continuous basis and the borrower is billed periodically for at least partial payment.
Revolving Check Credit A prearranged loan from a bank for a specified amount; also called a bank line of credit.

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