Credit Basics
What is credit?
The ability to borrow money and pay it back later.
What must you do after using a credit card?
Pay at least the minimum balance.
What is a credit score?
A number that shows how likely you are to repay money.
What is one benefit of good credit?
Lower interest rates.
Should you spend more on wants or needs?
Needs
What are the “3 C’s of Credit”?
Capacity, Character, Collateral
What happens if you don’t pay your credit card on time?
Late fees and your credit score can drop.
What is the range of a credit score?
300–850
What is one disadvantage of bad credit?
Higher interest rates or getting denied.
What should you always ask before buying something on credit?
"Do I Really Need this"
What does it mean when you use credit?
You are borrowing money with a promise to repay it (usually with interest).
What is a secured credit card?
A card backed by a deposit you put down.
What is the most important factor in your credit score?
Payment history.
How can good credit help you in the future?
Easier to get loans, apartments, or jobs.
What is debt-to-income ratio?
How much you owe compared to how much you earn.
What is interest?
The cost of borrowing money.
What is a good rule for how much of your credit limit to use?
No more than 30%.
Name one thing that can hurt your credit score.
Late payments, high debt, or applying for too much credit.
Name one group that checks your credit.
Banks, landlords, employers, or insurance companies.
What is a good habit to avoid debt?
Paying on time and keeping balances low.
Why is credit important? (Name one reason)
Helps you make big purchases, build financial trust, or handle emergencies.
What is one danger of using credit cards?
Overspending or going into debt.
What is considered a strong credit score goal?
Around 750.
True or False: Bad credit can affect job opportunities.
True.
What is debt?
The total amount of money you owe.