Types of Credit
This type of credit lets you borrow money again and again up to a set limit
What is revolving credit?
Paying your bills on time helps this 35% portion of your score.
What is payment history?
A reward of using credit wisely is earning this three-digit number.
What is a credit score?
Sam forgot to make a credit card payment. What should he do first?
What is contact the lender right away and make the payment?
You’re offered a store credit card with 25% APR. What should you do?
| What is compare rates or decline to avoid high-interest debt? |
This loan type is used for things like cars or student loans and has fixed monthly payments.
What is an installment loan?
Keeping your balance low compared to your limit improves this part of your score.
What is credit utilization?
Paying only the minimum balance leads to paying more of this.
What is interest?
Taylor is 18 and wants to build credit. What’s a safe first step?
What is become an authorized user or get a secured card?
When you don’t make payments, this process allows the lender to take your collateral.
| What is repossession? |
This loan is backed by something valuable, like a house or car.
What is a secured loan?
The older your credit accounts, the better this area of your score becomes.
What is length of credit history?
A risk of missing multiple payments is this negative mark on your credit report.
What is a delinquency?
Brianna’s card balance is $900 out of $1,000. What’s her best move?
| What is pay down her balance to lower credit utilization? |
This modern payment plan allows shoppers to split a purchase into smaller payments over time.
What is Buy Now, Pay Later?
Credit cards fall under this type of credit because the balance can change month to month.
What is revolving credit?
Having a mix of loans and credit cards helps this 10% part of your score.
What is credit mix?
One benefit of a high credit score is qualifying for these lower rates.
What are lower interest rates?
Malik lost his job and can’t make his loan payment. What’s his best option?
What is call the lender to ask about hardship options?
You want to raise your credit score quickly. What’s one habit to focus on?
What is making on-time payments consistently?
This short-term loan with very high fees can trap people in debt.
What is a payday loan?
Applying for too many new cards affects this part of your score.
What is new credit/inquiries?
A common reward credit card users enjoy when spending.
What are cashback or reward points?
Jordan has five credit cards and wants to boost his score. Should he close old ones?
What is no — keeping older accounts helps credit history?
You co-sign your cousin’s loan and they don’t pay. What happens?
What is you’re responsible for the debt?