Credit Fundamentals Glossary

What is the definition of 'Annual Fee'?

• A fee charged annually for a service or membership.

• A one-time fee charged at the beginning of a service.

• A monthly fee charged for a service.

• A fee charged every two years for a service.

What does 'Annual Percentage Rate (APR)' mean?

• The interest rate for a whole year, rather than just a monthly fee/rate.

• The monthly interest rate charged on a loan.

• The total amount of interest paid over the life of a loan.

• The percentage of a loan that is paid off each year.

An 'Authorized user' is:

• A person who has permission to access a system

• Anyone who uses a computer

• A person who owns a computer

• A person who writes software

What does 'Capacity' refer to in credit terms?

• The amount of credit a borrower is able to obtain

• The borrower's ability to repay the loan

• The borrower's credit history

• The value of the borrower's collateral

Character is defined in the context of credit as:

• A person's reputation for repaying debts

• The amount of money a person earns

• The number of credit cards a person has

• The interest rate on a loan

What is 'Child identity theft'?

• A type of theft involving stealing a child's toys

• The use of a child's personal information by another person for personal gain

• A crime where a child steals someone's identity

• A form of identity theft that only affects adults

What is 'Collateral' in financial terms?

• An asset pledged as security for a loan

• A type of insurance policy

• A financial statement

• A form of currency

A 'Cosigner' is:

• A person who agrees to pay a borrower's debt if they default

• A person who lends money to a borrower

• A person who manages a borrower's finances

• A person who provides investment advice

What is the meaning of 'Credit'?

• A loan or borrowing

• A type of currency

• A form of payment

• A financial penalty

What is a 'Credit card'?

• A type of loan

• A payment card issued to users

• A savings account

• A type of insurance