Managing Credit

Front

What is credit?

Back

Ability to borrow money or obtain goods or services before payment

Front

What are the advantages of having good credit?

Back

Lower interest rates on loans, higher chances of loan approval, access to better credit card offers, ability to negotiate better terms on loans, and improved financial opportunities.

Front

What are the disadvantages of having bad credit?

Back

Higher interest rates, difficulty in getting approved for new credit, limited access to financial opportunities, and potential damage to personal and professional relationships.

Front

What is a credit score and how is it calculated?

Back

A credit score is a numerical representation of an individual's creditworthiness. It is calculated based on various factors such as payment history, credit utilization, length of credit history, types of credit used, and new credit inquiries.

Front

What are some common factors that can negatively impact a credit score?

Back

Late payments, high credit card balances, maxed out credit cards, applying for multiple new credit accounts, and having a history of delinquent accounts or bankruptcy.

Front

What is the difference between a credit card and a debit card?

Back

A credit card allows you to borrow money from the bank to make purchases, while a debit card allows you to spend money directly from your bank account.

Front

What is the importance of making payments on time?

Back

To maintain a good credit score, avoid late fees and penalties, and build trust with creditors.

Front

What is a credit limit and how does it affect credit management?

Back

A credit limit is the maximum amount of credit that a lender or financial institution is willing to extend to a borrower. It affects credit management by determining the amount of available credit and credit utilization.

Front

What is the difference between a secured and an unsecured loan?

Back

A secured loan is backed by collateral, while an unsecured loan is not.

Front

What are some strategies for managing credit effectively?

Back

Making payments on time, keeping credit card balances low, avoiding unnecessary debt, regularly checking credit reports, and using credit responsibly.