Credit and Debt

What is debt?

• Money that is spent

• Money that is owed because of borrowing

• Money that you lend to others

What is the best way to manage credit and debt?

• use rewards

• spend now worry later

• Make big purchases

• set goals and budget

What is the best credit score you can have?

What is true about a credit score?

• Predicts the likelihood that a debt will be repaid

• A low credit score represents a low risk to banks

• The higher the credit score, the higher the interest rate you can get

• credit scores are not important to banks

What are you likely to find in a credit report?

• Bill Payment History

• Current Debt

• Types of Credit Used

• All of the above

What are the three C's that determine if you are credit worthy? (Select 3)

• Character

• Capacity

• Collateral

• Cash

Information that lenders gather about a borrower's willingness to repay a loan

• Capacity

• Collateral

• Character

Information lenders gather about a borrower's ability to repay a loan

• Capacity

• Collateral

• Character

protection for creditors in the event that they are not repaid

• Capacity

• Collateral

• Character

Payment history is an example of

• Capacity

• Collateral

• Character