Credit and Debt
Credit and debt can be used to achieve personal financial goals.
21. Credit and debt can be managed to maintain credit worthiness.
Credit is a valuable tool for making large purchases such as a house or automobile. Maintaining credit worthiness is important. An individual does this by carefully managing his or her credit and debt.
Managing credit includes:
- Paying bills on time;
- Limiting the number of credit cards; and
- Monitoring credit score reports.
The responsible use of credit helps one achieve financial and lifestyle goals. Handling personal finances responsibly helps establish credit worthiness that can result in the ability to obtain future credit.
Managing debt includes:
- Prioritizing potential purchases;
- Limiting borrowing;
- Monitoring expenses; and
- Creating a savings account.
Failure to manage one’s debt could result in bankruptcy, foreclosure, repossession of property, difficulty securing a job and/or inability to obtain future credit.
Expectations for Learning
Describe how credit and debt can be managed to maintain credit worthiness.