Understanding Credit and Financial Choices

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What is credit history?

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A record of a borrower's responsible repayment of debts.

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Why is a positive credit history important?

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It allows individuals to qualify for better loan terms.

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What is a credit report?

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A detailed report of an individual's credit history, used by lenders to assess creditworthiness.

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What does a credit score represent?

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A numerical expression of a borrower's creditworthiness, based on credit history.

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How can a good credit score benefit you?

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It can help you qualify for lower interest rates on loans.

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What are student loans?

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Loans that students can use to pay for their education, which must be repaid with interest.

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What happens if you don't repay a loan?

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You may face penalties, damage to your credit score, and potential legal action.

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What is interest?

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The cost of borrowing money, usually expressed as a percentage of the loan amount.

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How can you improve your credit score?

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By paying bills on time, reducing debt, and avoiding new hard inquiries.

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What is the difference between secured and unsecured loans?

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Secured loans are backed by collateral, while unsecured loans are not.