Podcast
Questions and Answers
What is a credit score?
What is a credit score?
What is the credit limit?
What is the credit limit?
The amount of money you can charge to a credit card.
What does a credit report include?
What does a credit report include?
A record of a person's credit history and identifying information.
The Fair Credit Reporting Act allows consumers to view their credit report.
The Fair Credit Reporting Act allows consumers to view their credit report.
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What is the Federal Fund Interest Rate?
What is the Federal Fund Interest Rate?
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A hard credit inquiry has no effect on your credit score.
A hard credit inquiry has no effect on your credit score.
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A soft credit inquiry affects your credit score.
A soft credit inquiry affects your credit score.
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What is the role of credit bureaus?
What is the role of credit bureaus?
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What does a credit history record?
What does a credit history record?
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What is a default in credit terms?
What is a default in credit terms?
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What is an Initial Fraud Alert?
What is an Initial Fraud Alert?
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Study Notes
Credit Score
- A numerical rating reflecting an individual's credit-worthiness, indicating the likelihood of repaying debts.
- The FICO score is the most widely used credit score in the United States.
- Based on information from credit reports generated by three main credit bureaus.
Credit Limit
- The maximum amount of money that can be charged to a credit card.
- Exceeding this limit may result in declined transactions and potential penalties.
Credit Report
- A detailed record of an individual's credit history, including loans and repayment activity.
- Contains identifying information (names, addresses) to match individuals with their credit histories.
Fair Credit Reporting Act
- A federal law ensuring accuracy, completeness, and privacy of information in credit reports.
- Consumers have the right to access their credit reports and dispute inaccuracies.
Federal Fund Interest Rate
- An interest rate established by the Federal Reserve Bank that influences government loan interest rates.
Hard Credit Inquiry
- Occurs when a creditor checks your credit history to make lending decisions.
- Affects your credit score and remains on credit reports for up to two years.
Soft Credit Inquiry
- A background check on credit that does not impact your credit score, often conducted for employment purposes.
Credit Bureaus
- Companies, also known as credit agencies, collect and analyze individual credit information.
- Major credit bureaus in the U.S. include Equifax, Experian, and TransUnion; they are private, for-profit entities regulated by the government.
Credit History
- A comprehensive record of all borrowing and repayment activities, including loans, credit lines, and payment records.
- Differentiates between the actions taken (credit history) and the documented proof (credit report).
Default
- Occurs when a borrower fails or refuses to repay a debt or required payment.
Initial Fraud Alert
- A temporary alert placed on a credit file to help prevent identity theft.
- Lasts for 90 days and can be renewed if necessary.
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Description
Test your knowledge on credit scores, reports, and limits. This quiz covers essential topics like the Fair Credit Reporting Act and federal interest rates, providing a comprehensive look at personal finance. Assess your understanding of the factors that impact creditworthiness.
