Credit and Debt
What does a credit score measure?
Your creditworthiness / likelihood to repay debt.
Payment History
Length of Credit
Inquiries
What is a checking account used for?
Daily spending
What is a budget?
Plan for income and expenses
What is a stock?
Ownership in a company
You earn $2,000/month and spend $2,200. What happens?
You go into debt
What is considered a “good” credit score range?
670–739
What is a savings account mainly for?
Saving money / earning interest
What percentage is commonly recommended for savings?
At least 10–20%
What is a bond?
Loan to a company/government
You get a $500 bonus—what’s the smartest move?
Save/invest/pay debt (any reasonable answer)
What happens if you only pay the minimum on a credit card?
Interest builds, debt lasts longer
What does FDIC insurance do?
Protects deposits up to $250,000
Fixed vs variable expense—give one example of each
Rent (fixed), food (variable)
What is compound interest?
Interest earning interest
Your car breaks down and you have no savings. What might you rely on?
Credit card/loan
Name one factor that affects your credit score
Payment history, utilization, length of credit, etc.
What is overdraft?
Spending more than you have
What is the 50/30/20 rule?
Needs/wants/savings breakdown
Which is generally riskier: stocks or bonds?
Stocks
You miss a credit card payment. What happens?
Late fee + credit score drop
What is APR?
Annual Percentage Rate
What is direct deposit?
Paycheck deposited automatically
Why is an emergency fund important?
Covers unexpected expenses
What is diversification?
Spreading investments to reduce risk
Rent increases by $300—what’s one smart adjustment?
Cut expenses, increase income, move, etc.