Dave Ramsey Foundations in Personal Finance – Chapter 4 Money in Review

Credit Report A detailed report of an individual’s credit history
Loan Term Time frame that a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term
Depreciation A decrease or loss in value
Credit Score A measure of an individual’s credit risk; calculated from a credit report using a standardized formula
Debt Snowball Preferred method of debt repayment; includes a list of all debts organized from smallest to biggest balance; minimum payments are made to debts except for the smallest, which is attacked with the largest payments
Annual Percentage Rate Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan
Credit Card Type of card issued by a bank that allows users to finance a purchase
Annual Fee A yearly fee that’s charged by the credit card company for the convenience of the credit card
False You must establish credit in order to buy a house.
False If you are a victim of identity theft, you are only responsible for paying back half of the debt.
Paying cash for all purchases Which of the following is not a factor in determining a FICO score?
Borrow money from your parents to pay off the debt Which of the following is not a good idea for getting out of debt?
Go into debt Which of the following things cannot be done with a debit card but can be done with a credit card?

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