FFC Debt and Credit Management

Question 1

What is a credit score used for?

Accepted Answer

Evaluate creditworthiness

Answer

Lenders use it to assess a person's creditworthiness.

Question 2

Which strategy reduces credit card debt effectively?

Accepted Answer

Pay more than the minimum balance

Answer

Paying more than the minimum reduces the principal faster.

Question 3

What is a key component of debt management?

Accepted Answer

Develop a structured repayment plan

Answer

Creating a repayment plan helps reduce debt systematically.

Question 4

What happens with late credit payments?

Accepted Answer

They lower credit scores and add penalties

Answer

Late payments negatively affect credit scores and may incur fees.

Question 5

Which tool helps track debt and payments?

Accepted Answer

Debt payoff calculator

Answer

Debt payoff calculators aid in visualizing progress.

(FFC) Financial Fitness Coach Certification Practice Test