Credit Basics
What is a credit score?
A number (usually 300–850) that shows how risky it is to lend you money.
What is interest?
The cost of borrowing money
What is one simple way to rebuild credit?
Pay bills on time.
True or False: Financial stress can be a relapse trigger.
True
What is a budget?
A plan for how you will spend and save your money.
What is the most important factor affecting your credit score?
Payment history (paying bills on time)
If you only make minimum payments on a high-interest credit card, what happens?
You pay much more money over time
What is a secured credit card?
A card backed by your own deposit that helps build credit safely.
What is the 24 Hour Rule?
Waiting 24 hours before making a non-essential purchase.
What should you prioritize paying first each month?
Basic needs like rent, utilities, food, and transportation.
True or False: Checking your credit score lowers it
False
Why are payday loans dangerous?
Extremely high interest rates and short repayment periods can trap people in debt.
How long does it usually take to see improvement in credit?
About 3–6 months to see change, longer for major improvement.
Why can payday be a risky time in early recovery?
Access to cash can trigger impulsive spending or cravings.
What is an emergency fund?
Money set aside for unexpected expenses like car repairs, medical bills, or emergencies.
What are the three major credit bureaus?
Equifax, Experian, and TransUnion.
If you borrow $500 with very high interest and can’t repay it in two weeks, what often happens?
You roll it over and owe even more money.
Should you close old credit accounts if you can avoid it? Why or why not?
No, because older accounts help your credit history length.
What is one healthy way to protect yourself financially in early recovery?
Use a debit card instead of cash
Have accountability
Stick to a budget
Plan spending ahead of time
If you have $2,000 in monthly income and $2,200 in monthly expenses, what is the problem called?
A budget deficit (you’re spending more than you earn).
What happens to your credit score if you max out your credit card?
It usually lowers your score because your debt usage is high.
What is a safe percentage of your credit limit to use to protect your score?
Under 30%
What matters more when rebuilding credit — paying a large amount once or paying consistently on time?
Paying consistently on time.
How is rebuilding credit similar to recovery?
Takes consistency
Takes time
Requires accountability
Small daily habits matter
Why is planning your spending before payday helpful in recovery?
Reduces impulsive spending
Lowers stress
Prevents relapse triggers
Helps you stay accountable
Keeps money aligned with recovery goals