Ch.16 Credit Basics

______ is an agreement between two parties in which one party lends money or provides goods or services to another party with the understanding that payment will be made at later date.

• Debit

• Credit

• Savings

True or False: Your credit score is a number between 300 and 850 and helps lenders decide how creditworthy you are.

• True

• False

True or False: Opening new accounts to spread debt around can help you improve your credit score

• True

• False

The party receiving credit is known as the _____.

• creditor

• lender

• debtor

The party extending credit is known as the _____.

• debtor

• creditor

• borrower

True or False: A high credit score often qualifies you for lower rates on loans, and better deals on insurance.

• True

• False

_____ credit loans require collateral.

• Unsecured

• Secured

• Finance

Which of the following is NOT one of the Three Cs of Credit?

• Character

• Coolness

• Capital

• Capacity

_______ is a list of the individuals or businesses that owe money to a company.

• Accounts receivable

• Accounts payable

One of the benefits of credit is ____.

• the opportunity to buy costly items

• interest charges

• finance charges

• credit risk