Lesson 6 Day 2 Mastering Debt

Is debt always bad for your credit score?

• Yes, debt is always bad for your credit score

• No, debt can be good or bad depending on how it is managed

• Debt does not affect your credit score

• Only large amounts of debt are bad

Which of the following is a way to handle debt?

• Ignore your debt

• Make regular payments to reduce your debt

• Take on more debt without a plan

• Never check your credit score

Why is it important to sit quietly after finishing the "Do Now" activity?

• To avoid disturbing others who are still working

• To get extra credit

• To start a conversation with the teacher

• To leave the classroom early

Who do creditors hire to recover the money when payments are missed?

• A company

• A lawyer

• A friend

• A bank

What is a potential consequence of having a debt sent to collections?

• It can improve your credit score

• It can impact your credit score negatively

• It will erase your debt

• It will increase your payment options

What is debt consolidation?

• Taking out a new loan to pay off several smaller debts, resulting in one monthly payment.

• Borrowing more money without paying off any debts.

• Ignoring all debts until they are forgotten.

• Paying off one debt at a time without any new loans.

If you owe $2,000 on three different credit cards, how much would you consolidate into one loan?

• $2,000

• $4,000

• $6,000

• $8,000

Credit counseling is usually:

• Free or low-cost.

• Very expensive.

• Only available online.

• Only for people with no debts.

What is one risk associated with using a debt settlement company?

• They may charge fees and not guarantee a settlement.

• They always pay off your debt in full.

• They increase your credit score immediately.

• They provide free services.

If you owe $10,000 and a debt settlement company convinces your creditors to accept $7,000, how much of your debt is settled?

• $7,000

• $10,000

• $3,000

• $5,000