Podcast
Questions and Answers
What is the primary purpose of saving money?
What is the primary purpose of saving money?
- To increase immediate spending
- To delay spending to a later time (correct)
- To invest in high-risk ventures
- To avoid paying taxes
What does a credit rating primarily indicate about an individual?
What does a credit rating primarily indicate about an individual?
- The number of credit cards they possess
- Their ability to repay debt (correct)
- Their current net worth
- Their investment portfolio performance
Which of the following actions is NOT a suggested method to enhance a credit score?
Which of the following actions is NOT a suggested method to enhance a credit score?
- Consistently paying bills on time
- Adding your name to someone else's credit card account
- Maximizing credit limits on all credit cards (correct)
- Becoming an authorized user on an existing account
What is a likely outcome of having a good credit score?
What is a likely outcome of having a good credit score?
Besides making on-time payments, another way to improve one's own credit score is to:
Besides making on-time payments, another way to improve one's own credit score is to:
Flashcards
Credit Rating
Credit Rating
The ability to repay a loan based on your past financial actions.
On-Time Payments
On-Time Payments
Paying back money owed on time and consistently.
Authorized User
Authorized User
Adding someone to your credit card for them to build credit.
Saving
Saving
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Easier Access to Loans
Easier Access to Loans
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Study Notes
Saving and Spending
- Saving refers to allocating income for a future date.
- Reasons for saving include emergencies and future needs.
- Regularly saving money improves credit rating.
- Regular saving demonstrates financial responsibility.
Credit Rating
- A credit rating reflects a person's ability to repay loans.
- Banks use credit ratings to assess loan applicants.
- A good credit rating increases a person's likelihood of obtaining loans.
Improving Credit Score
- Timely payments are crucial for a good credit rating.
- Late payments negatively impact credit reports for two years.
- Authorization as an authorized user on someone else's credit card can improve credit scores.
- Positive credit history creates trust with creditors and improves loan access.
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