Understanding Credit
This three digit number shows how likely you are to repay borrow money.
What is a credit score?
Making these on time is the biggest factor in your credit score.
What are payments?
This type of account usually offers the highest interest rates for saving money safely.
What is a high-yield savings account?
Paying off debt with the smallest balance first is known as this method.
What is the debt snowball?
A plan that shows income and expenses over time.
What is a budget?
Two main types of credit accounts are revolving credit (credit cards) and this type.
What is installment credit? (loans)
A secured credit card requires this to back it up.
What is a security deposit?
A good rule of thumb is to save this percentage of your income for emergencies and future needs.
Paying off debt with the smallest balance first is known as this method.
What is the debt avalanche?
This budgeting rule splits income into 50% needs, 30% wants, 20% savings/debt.
What is the 50/30/20 rule?
This report shows your borrowing history and is used to calculate your credit score.
What is a credit report?
Being an authorized user on someone else's credit card can help you do this.
What is build credit?
The recommended emergency fund covers this many months of expenses.
What is 3 to 6 months?
This type of loan combines debts into one payment.
What is a consolidation loan?
This type of expense does not change month to month, like rent.
What is a fixed expense?
Name two major credit bureaus.
What is Experian, Equifax, or TransUnion?
Applying for too many credit cards at once can hurt your score because of this
What are hard inquiries?
Putting money in this type of savings account locks it in for a set period of time but earns more interest.
What is a certificate of deposit (CD)?
When debts are too high to pay, some people file for this legal process to start fresh.
Money you spend on things like dining out or hobbies are called these expenses.
What are variable expenses?
This percentage range of your available credit you should say under to keep a healthy score.
What is 30% or less?
The length of time you've had credit accounts makes up about this percent of your credit score.
What is 15%?
This type of savings is specifically meant for retirement and may have tax benefits.
What is an IRA or a 401(K) (TSP)?
This is a term used when past due on your debt.
What is delinquency?
Car repairs, holidays, or back-to-school shopping are examples or this kind of expense that doesn't happen every month.
What is an irregular expense?