Introduction to Credit

What does credit primarily involve?

• Investing in stocks and bonds

• Exchanging goods without monetary transactions

• Borrowing resources to be paid back later.

• Saving money for future use

What is the 'principal' in terms of credit?

• The interest rate applied to the borrowed amount

• A penalty fee for late repayment

• The initial amount of money borrowed.

• The total amount of money borrowed including interest

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CCSS.7.RP.A.3

Why might interest be charged on borrowed money?

• As a reward for timely repayment

• To cover administrative costs only

• As a charge for borrowing or for late repayment.

• To decrease the total amount owed over time

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CCSS.HSN.RN.B.3

What is a credit report used for?

• To record personal identification information

• To track the borrower's financial history and reliability.

• To register the borrower's employment history

• To list the borrower's personal assets

What are the two most common types of credit discussed?

• Car loans and credit cards

• Student loans and payday loans

• Credit cards and loans.

• Mortgages and personal loans