Page 210 - digitalliteracy

Summary & Resources

Fair Credit Reporting Act Federal legisla- loan principal The amount of money you
tion intended to ensure that the consumer borrowed or the amount you still owe on
information contained in the files of con- your loan.
sumer reporting agencies is accurate, fair,
and private. loan term The length or duration of your
loan.
Federal Deposit Insurance Corporation
A federal entity created by Congress whose simple interest Interest that is applied
purpose is to preserve and promote public to the original principal balance after each
confidence in the U.S. financial system by period; it is not applied to interest that has
insuring depositors for at least $250,000 per accrued.
insured bank; by identifying, monitoring,
and addressing risks to the deposit insur- skimmer A card reader that can store
ance funds; and by limiting the effect on the credit or debit card information to then be
economy and the financial system when a reproduced on a credit card encoder.
bank or thrift institution fails.
soft credit inquiries The perusal of a credit
fraud alert A notification placed on your report by an insurance company, future
credit report to let potential lenders know employer, or credit card company that looks
that there have been incidents of suspected through credit bureau reports to determine
fraud on the consumer’s account. A fraud whether to extend a preapproved offer for
alert helps consumers protect themselves credit to an individual in the future. These
from anyone opening an unauthorized credit inquiries do not work against the consum-
account in their name. ers’ credit score and are unseen by hard
credit inquirers.
grace period The period of time between
when an individual graduates and when loan VantageScore 3.0 A mathematical formula
repayment begins. Typically this is 6 to 9 that the three major credit bureaus devel-
months following graduation. oped to generate your credit score based
on payment history, age and type of credit,
hard credit inquiries Checks by a credi- percentage of credit line used, total balance
tor on a consumer’s credit report to deter- or debt, recent credit behavior, inquiries,
mine whether to extend credit for which the and available credit.
consumer has applied. These inquiries can
remain on a credit report for up to 2 years.

identity theft A situation in which someone
steals your personal information with the
intent to open credit accounts in your name.

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