What is Credit
What is credit?
What is when you borrow money and agree to pay the lander later.
What is debt?
What is money you owe to someone that you agreed to pay back.
What is credit score?
What is the three-digit number that shows people how reliable you are with money.
What is a credit card?
What is a tool/card that allows you to pay for items with money from your bank that you have to pay back later usually at the end of the month.
If you purchase a $40,000 car that has a 5-year loan, but 5 months later you miss a payment because of unpredicted expenses will your credit score go up or down?
What is down.
What is interest?
What is interest is the cost of borrowing money (extra money added to the amount of money you owe).
Who is a debtor?
Who is someone who owes money.
Who is a lender?
Who is someone (or a company) that gives you money to borrow.
What is the principal?
What is the original amount of money borrowed.
How can someone avoid borrowing money when they cannot repay it later?
What is by budgeting and understanding their income.