Credit & Taxes

What is credit?

• The ability to borrow money or access goods or services with the understanding that you will pay later

• Lenders and service providers grant money based on their confidence you can be trusted to pay back what you borrowed

• A score you are given based on your spending habits

• Something banks use to control your money

What is a creditor's job?

• They borrow money or access goods or services with the understanding that you will pay later

• They grant credit based on their confidence you can be trusted to pay back what you borrowed

• They create credit scores for people who hire them to do so

What do creditors do to know if they can trust you or not?

• Your credit history, your record of borrowing and repaying funds

• They call your bank and your employer

• None of the above

• All of the above

What does your credit score tell you?

• Payment history

• Credit utilization

• Credit inquiries

• All of the above

Which of the following credit scores is considered to be the best?

• 100

• 500

• 800

• 700

Why is having credit important?

• If you do not have any credit, lenders do not know if they can trust you or not

• Having good credit saves you money

• Both A and B

• Neither A and B

Interest rate is...

• The amount of money you borrow

• Extra money someone charges you for borrowing money

• Something that helps your credit score

• The maximum amount of money you can borrow

__________ credit is when you are given a maximum borrowing limit and you can make charges up to that limit.

• Revolving

• Service

• Installment

• All of the above

________ credit has contracts with service providers such as gas and electric utilities, internet providers; cell phone companies; and gyms agreeing you will pay for monthly use.

• Revolving

• Service

• Installment

• None of the above

_______ credit is a loan for a specific amount of money you agree to repay+interest+fees, in a series of monthly payments over a set period of time.

• Revolving

• Service

• Installment

• All of the above