Final Assessment – Understanding a Paycheck and Pay Stub

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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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What factors contribute to a credit score?

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Factors include payment history, length of credit history, total amount owed, types of credit used, and new credit inquiries.

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What are impulse purchases?

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Impulse purchases are unplanned, spontaneous buying decisions often triggered by emotions or immediate desires.

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What is purchasing power in terms of credit?

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Purchasing power refers to the ability to buy goods and services, which can be enhanced by using credit.

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What is gross pay?

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Gross pay is the total amount of money earned by an employee before any deductions, calculated by multiplying hourly wage by hours worked.

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What is net pay?

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Net pay is the amount of money an employee takes home after all deductions, such as taxes and benefits, have been subtracted from gross pay.

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What is open-end credit?

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Open-end credit is a type of credit that allows borrowers to use funds up to a certain limit and pay it back over time, such as credit cards.

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What is closed-end credit?

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Closed-end credit is a type of credit that is borrowed for a specific purpose and must be paid back in full by a set date, such as a car loan.

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What are fixed expenses?

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Fixed expenses are regular, recurring costs that do not change in amount, such as rent or mortgage payments.

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What are variable expenses?

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Variable expenses are costs that can fluctuate in amount, such as groceries or entertainment.