Term
| Components of Credit/FICO score |
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Definition
| Payment history, Amounts owed,Length of credit history, New credit, Types of credit used. |
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Term
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Definition
| 1) Apply for Credit. 2) The lender conducts a credit investigation. 3) The lender decide whether to accept the application. |
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Term
| Fair Credit Reporting Act |
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Definition
| Credit card reports must contain relevant, accurate, and recent information and that only bona fide users be permitted to review a file for approved purposes. |
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Term
| Differences between Chapter 7 and Chapter 13 Bankruptcy. |
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Definition
| Chapter 7 is a fresh start, and chapter 13 is a reorganization. |
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Term
| How long does negative info stick around for? |
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Definition
Two years for inquires and payments.
Seven years for most info.
Ten years for bankruptices.
Criminal Convictions -- No Limit. |
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Term
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Definition
| The true cost. The cost of credit on a yearly basis. |
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Term
| Signs of Overindebtidness |
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Definition
Exceeding debt limits and credit limits
Not knowing how much you owe
Running out of money
Paying only the minimum amount due
Requesting new credit cards and increases in credit limits
Paying late or skipping credit payments
Using debt-consolidation loans
Taking add-on loans
Experiencing garnishment
Experiencing repossession or foreclosure |
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Term
| When is the Rule of 78 used? |
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Definition
| When calculating the prepayment on a loan. |
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Term
| Fair and Accurate Credit Transactions Act |
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Definition
| Added new sections to FCRA intended primarily to help consumers fight the growing crime of identity theft. Accuracy, privacy, limits on information sharing, and new consumer rights to disclosure. |
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Term
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Definition
| Collect and keep records of many borrower's histories. |
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Term
| Repossession v. Foreclosure |
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Definition
| Foreclosure is when the lender sues the borrower to prove default and asks the court to order the sale of the property. Repossession is simply straight up seizing the possession. |
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Term
| Unescured Credit/Secured Credit |
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Definition
| Unsecured credit relies solely on the good credit of the loanee whereas secured credit calls for co-signers. |
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Term
| Federal Truth in Lending Act |
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Definition
| Requires lenders to disclose to credit applicants both the interest rate expressed as an annual percentage rate (APR) and the finance charge. |
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Term
| Finance Charge with Discount Method. |
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Definition
| Interest is paid up front and subtracted from the amount of the loan. |
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Term
| Finance Charge, simple method |
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Definition
| Interest is calculated and added to the amount borrowed to determine the total amount to be repaid. |
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Term
| What must credit card applications disclose? |
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Definition
| Rates, fees, other costs. APR, Grace period, Method of Computing Balance. |
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Term
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Definition
| A high APr that is assessed whenever a borrower fails to uphold certain rules of the account, such as making on time payments or staying within the specified credit limit. |
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Term
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Definition
| The use of a credit card to obtain cash rather than make a purchase directly. |
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Term
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Definition
| Helps who wish to dispute the billing errors on revolving credit accounts. |
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Term
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Definition
| Do your research and become an expert on what you are considering purchasing. |
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Term
| Difference between close end and open end lease. |
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Definition
| In close end, the lesee does not have to pay a fee if the market value of the vehicle is lower than the initial projected value. |
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Term
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Definition
| Look for the extended warranty. |
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Term
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Definition
| The process of righting a wrong. Starts with a complaint. |
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Term
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Definition
| Pays off the remainder of a totaled vehicle after and accident loan if the insurance payment is insufficient to do so. |
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Term
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Definition
| Both involve a neutral third party who helps the other parties come to a decision. In arbitration however, the decision that is made by the third party is legally binding. |
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Term
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Definition
| A warranty that satisfies three requirement. 1)Products must be fixed quickly, at no cost to the buyer. 2)Owner will not have to do anything unreasonable to get the product fixed. 3)Defective products will be replaced with new ones, or a full refund will be issued. |
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Term
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Definition
| If you are going to be away for a short time and you want to maintain the property. |
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Term
| Who does better, renters or owners? |
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Definition
| Based on cash flow, renters come out ahead as there is less for them to be finanically responsible over. Yet, after taxes and appreciation, owners come out on top. You can deduct home ownership in taxes and house values tend to rise. |
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Term
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Definition
| The standard of living that we have become accustomed to. Running water, electricity... etc. |
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Term
| What are property taxes based on? |
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Definition
| The value of the building and the land. |
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Term
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Definition
Must be paid at the closing and include fees and charges other than the down payment; may vary from 2 to 10 percent of the mortgage loan amount.
Closing costs can include:
Lawyer
Points (1 point = 1% of loan amount)
Pro-rated property taxes
Pro-rated utilities |
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Term
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Definition
| Agreement that includes a lender's promise to gold a certain interest rate for a specified period of time, such as 60 days. |
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Term
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Definition
| Calls for payments to be made every two weeks that represent half of the normal monthly payment. |
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Term
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Definition
| Borrower’s interest rate fluctuates according to some index of interest rates based on the performance of the economy. |
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Term
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Definition
| Occurs when monthly payments are actually smaller than necessary to pay the interest. |
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Term
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Definition
| Special reserve account at a financial institution in which funds are held until they are paid to a third party for example, for home insurance and for property taxes. |
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Term
| Peril, Hazard, Exposure, Risks |
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Definition
Peril : An event that can cause a financial risk.
Hazard : Any condition that increases the probability that a peril will occur. |
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Term
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Definition
Step 1 : Identify sources of risk.
Step 2 : Estimate risk and potential losses.
Step 3 : Choose how to handle risk.
Step 4 : Implement the risk-management program.
Step 5 : Evaluate and adjust the program. |
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Term
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Definition
| Combines the liability and property insurance coverages needed by homeowners and renters into a single package policy. |
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Term
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Definition
Physical Hazard – a particular characteristic of the insured person or property that increases the chances of loss.
Morale Hazard – exists when a person is indifferent to peril or does not care if it occurs.
Moral Hazard – exists when an insured person wants and causes a peril to occur so that he or she can collect on an insurance policy. |
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Term
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Definition
| A named-perils policy that protects the insured from losses to the contents of a dwelling rather than the dwelling itself. |
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Term
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Definition
Provides open-perils (war, flood, earthquake) protection for four types of property losses:
losses to the dwelling
losses to other structures
landscaping losses and
losses generating additional living expenses. |
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Term
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Definition
| Insurance will pay for the loss, not the full reimbursement amount. |
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Term
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Definition
Contact your insurance agent
Document your loss
File your claim
Claim adjuster
Sign a release |
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Term
| Auto Insurance Liability Coverage |
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Definition
Automobile Bodily Injury Liability – occurs when a driver or car owner is held legally responsible for bodily injury losses suffered by other persons, including pedestrians.
Automobile Property Damage Liability – occurs when a driver or car owner is held legally responsible for damage to the property of others. |
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Term
| Umbrella Liability Insurance |
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Definition
| a catastrophic liability policy that covers liability losses in excess of those covered by any underlying homeowner’s, automobile, or professional liability. |
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