Financial Math: Credit Score

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What is a credit score?

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A credit score is a numerical representation of a person's creditworthiness, based on their credit history and financial behavior.

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How does having debt affect wealth building?

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Having debt can hinder wealth building as it reduces disposable income and can lead to high interest payments.

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What is the consequence of spending more than you earn?

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Spending more than you earn can lead to missed opportunities to save and invest, increased stress, and a cycle of debt.

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How often can you request a free credit report from each of the three credit bureaus?

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You can request a free credit report once a year from each of the three credit bureaus.

Front

What is the impact of learning the language of money?

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Learning the language of money is crucial for making informed financial decisions and not relying solely on others.

Front

What was a significant change in consumer borrowing after WWII?

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After WWII, Americans learned to borrow more due to increased prosperity and availability of credit.

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What is the role of banks in consumer lending?

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As banks make profits, they tend to lend more money to consumers, which can increase overall consumer debt.

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What does a high credit score indicate?

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A high credit score indicates a strong credit history and a lower risk for lenders.

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What factors can negatively impact your credit score?

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Late payments, high credit utilization, and having too many hard inquiries can negatively impact your credit score.

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What is the difference between secured and unsecured debt?

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Secured debt is backed by collateral, while unsecured debt is not and is based solely on the borrower's creditworthiness.