Unit 3 Managing Credit Flashcards
(11 cards)
What are the two most important credit score factors?
Payment history and credit utilization.
What does a credit report include?
Payment history, credit usage, and types of credit.
What’s not on a credit report?
Salary.
How can you improve your credit score?
Pay on time, lower balances, and avoid too many new credit applications.
What is wise credit usage?
Use less than 30% of your limit and pay in full monthly.
What is the snowball method of debt repayment?
Pay off the smallest debt first to build momentum.
What is the avalanche method of debt repayment?
Pay off the highest-interest debt first to save money.
What helps build credit?
Secured credit cards, being an authorized user, or repaying student loans.
What happens if you default on a loan?
Your wages may be garnished, credit is damaged, and legal action may follow.
What is a cosigner’s role?
Helps you qualify for a loan and may lower interest if they have good credit.
What’s a secured credit card?
A card backed by a cash deposit that acts as your credit limit.
