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cfm vocab
| Question | Answer |
|---|---|
| Maturity Date | the date on which a borrower's final loan payment is due |
| Amortization | the amount of principal and interest paid each month over the course of your loan term |
| Credit report | is a record of the borrower's credit history from a number of sources, including banks, credit card companies, collection agencies, and governments. |
| Credit Score | a numerical rating representing the perceived ability of a person or organization to fulfill their financial commitments, based on an analysis of their credit history and current financial circumstances. |
| Identity Theft | the act of stealing someone's personal information |
| Identity Fraud | is the use of an individual's identifying information to commit crimes. |
| Debt | money owed by a borrower to a lender |
| Credit | someone is willing to loan you money, called principal, in exchange for your promise to repay the money later, usually with interes |
| Principal | the amount borrowed |
| Interest | the amount you pay to use someone else’s money, usually a percentage of the principal. The higher the interest percentage rate, the higher the total amount you pay to buy something on credit |
| Loan Term | the amount of time you are obligated to make payments |
| Fixed interest rate | stays the same for the life of the loan or account. Your monthly payment will stay the same too. |
| Variable interest rate | Change at specified times so as the rate goes up or down; your payment amount will change too |
| Collateral | an asset that a lender accepts as security for giving a loan. (If the borrower defaults (doesn’t pay) on his/her loan payments, the lender may take the collateral and sell it to recoup some or all of his losses.) |
| Cosign | sign (a loan or lease) jointly with another person in order to guarantee payment |
| Cosigner | serves as an additional repayment source for the primary borrower |
| Installment loan | used to finance a specific purchase for a specific amount of time. Regular payments are made to pay the interest and the principal (ex. car loan, mortgage) |
| Revolving credit | an open line of credit that can be used for any purchases as long as you’re under the credit limit. Payment amounts vary each pay period based on the size of the debt (ex. credit card) |
| Credit Limit/Line of Credit | amount of money you can borrow to pay back later |
| Minimum Payment | the lowest amount of money you are required to pay on your credit card statement each month |
| Outstanding Balance | the amount you still owe after making your most recent payment |
| Annual Percentage Rate (APR) | consistent way to report interest; includes interest, fees and loan costs |
| Introductory Rate | “teaser” rate for a short period to tempt you to borrow |
| Grace Period | the amount of time before interest starts accumulating on charged purchases if payment is not received |
| Annual Fee | fee that the provider automatically charges once a year to your account for the benefits that come with that credit card. (Annual fees, when they're charged, range from $25 to $500 depending on the credit card.) |
Created by:
Rain2026