1. **Spending Limit:** Financial prudence suggests not exceeding 30% of take-home pay on credit to maintain a balanced budget.
2. **Credit Age Requirement:** Creditors typically require applicants to be 18 years old, the legal age of adulthood.
3. **Notification Period:** Creditors must inform applicants of credit approval or denial within 30 days of application.
4. **Good Risk Indicator:** Being a "good risk" signals a high likelihood of responsible repayment.
5. **Debt Record:** Creditors assess debt records to evaluate creditworthiness based on outstanding debts and payment history.
6. **Credit Score Calculators:** Credit reporting agencies determine credit scores, vital for assessing creditworthiness.
7. **Lending Entities:** Creditors are individuals or entities engaged in lending money.
8. **Credit Score Significance:** Credit score, a numerical representation, determines creditworthiness—the higher the score, the better.
9. **Monthly Earnings:** Income reflects the amount earned monthly, a key factor considered by creditors.
10. **Regular Payments:** Expenses encompass monthly financial obligations, including bills and living costs.
11. **Repayment Reliability:** Credit risk gauges the likelihood of timely loan repayment or payments.
1. **You should never spend more than this percentage of your take-home pay on credit:**
- *Answer:* 30
- *Explanation:* Financial experts often recommend that individuals should not spend more than 30% of their take-home pay on credit-related expenses to maintain a healthy financial balance.
2. **Most creditors require you are this age to be approved for credit:**
- *Answer:* 18
- *Explanation:* Many creditors require individuals to be at least 18 years old to be eligible for credit, as this is the legal age of adulthood in many jurisdictions.
3. **Creditors must inform you within this many days whether you have qualified or been denied for credit:**
- *Answer:* 30
- *Explanation:* According to regulations, creditors are generally required to inform applicants within 30 days about the status of their credit application, whether it's approved or denied.
4. **Being this means you are likely to pay back the money you borrow:**
- *Answer:* Good risk
- *Explanation:* Being considered a "good risk" implies that you are likely to repay borrowed money responsibly and are viewed favorably by creditors.
5. **Creditors will look at this—any money you owe—to determine whether you are a good risk:**
- *Answer:* Debt record
- *Explanation:* Creditors assess your debt record, which includes details of your outstanding debts and payment history, to evaluate your creditworthiness.
6. **Companies who determine your credit score:**
- *Answer:* Credit reporting agencies
- *Explanation:* Credit reporting agencies compile information on individuals' credit histories and calculate credit scores, which are used by creditors to assess creditworthiness.
7. **Someone who is in the business of lending money:**
- *Answer:* Creditor
- *Explanation:* A creditor is an entity or individual that lends money to borrowers with the expectation of repayment.
8. **Number calculated to determine whether you are a good risk; the higher the number, the better score:**
- *Answer:* Credit score
- *Explanation:* The credit score is a numerical representation of an individual's creditworthiness, with a higher score indicating better creditworthiness.
9. **The amount of money you make each month:**
- *Answer:* Income
- *Explanation:* Income refers to the amount of money an individual earns each month, and it is a key factor considered by creditors when evaluating creditworthiness.
10. **Things you must pay each month:**
- *Answer:* Expenses
- *Explanation:* Expenses encompass all the financial obligations and payments that individuals are required to make regularly, such as bills and living costs.
11. **How likely you are to repay a loan or payments on time:**
- *Answer:* Credit risk
- *Explanation:* Credit risk refers to the likelihood that a borrower will fail to repay a loan or make payments on time, influencing the decision of creditors in approving or denying credit.