Credit Scores
What is the highest possible credit score?
850
What is the difference between good debt and bad debt?
Good debt helps build wealth (e.g., student loans, mortgages); bad debt has high interest with no return (e.g., credit card debt used for shopping).
What’s the recommended emergency fund amount?
3–6 months’ worth of expenses
What is the stock market?
marketplace where people buy and sell company shares.
What is impulse buying?
Purchasing something unplanned, usually due to emotions.
Name two factors that affect your credit score.
Payment history & credit utilization
What does APR stand for?
Annual Percentage Rate
What does “pay yourself first” mean?
Setting aside savings before spending on other expenses.
What is diversification in investing?
Spreading investments across different assets to reduce risk.
What’s one way to reduce grocery spending?
Meal planning or buying in bulk.
What is a “hard inquiry” on your credit report?
When a lender checks your credit before giving you a loan or credit card, which may slightly lower your score
What is the “snowball method” for paying off debt?
Paying off the smallest debts first while making minimum payments on larger ones
What is compound interest?
Interest earned on both the initial deposit and previously earned interest.
What’s the difference between a stock and a bond?
A stock represents ownership in a company, while a bond is a loan to a company or government.
How does buying generic brands save money?
Generic brands often have the same quality as name brands but cost less.
How long does a missed payment stay on your credit report
7 years
If you only make the minimum payment on a credit card, what happens?
Interest accumulates, making the total debt higher over time.
If you save $10 a week, how much will you have in a year (without interest)?
$520
What is an IRA?
An Individual Retirement Account, used for saving for retirement with tax benefits.
What is a common red flag of a financial scam?
Requests for upfront payments or personal information.
What’s the best way to improve a low credit score?
Pay bills on time, reduce credit utilization, and keep old accounts open.
True or False: Bankruptcy erases all types of debt.
False – student loans and tax debts usually remain
Name two high-yield savings account benefits.
Higher interest rates & easy access to funds.
What is the average long-term return of the stock market?
About 7-10% annually.
What is the 50/30/20 rule?
Budgeting 50% for needs, 30% for wants, and 20% for savings.