Maintaining good credit

Question 1

ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
the ability to borrow money or access goods and services with the understanding that you’ll pay later. Car loans, Mortgages, Personal loans
Lines of credit

Answer 1

Credit

Question 2

T Credit Acc
credit provides you with a lump-sum amount, which you’ll repay in regular installments over a fixed period. (mortgages, auto loans, student loans and personal loans)

Answer 2

Installment Credit

Question 3

T Credit Acc
allows you to borrow up to a certain limit, pay it
back and borrow again.
(Credit cards, lines of credit)

Answer 3

Revolving credit

Question 4

Impact of a Good Credit Report (3)

Answer 4

Better loan approval chances.

Lower interest rates

Increased trust from lenders, landlords, and even potential employers.

Question 5

Improving Your Credit Report (3)

Answer 5

Pay your bills and loans on time.

Avoid overextending your credit limits.

Regularly review your credit report for errors.

Question 6

a three-digit number that provides you and others with a snapshot of your overall credit health.
measures a borrower’s creditworthiness based on his or her past financial transactions. 300-850

Answer 6

credit score

Question 7

the primary government body responsible for gathering and consolidating credit data in the Philippines.

Answer 7

Credit Information Corporation (CIC)

Question 8

provide credit scores based on the data they receive from the CIC.

Answer 8

Private credit bureau

Question 9

Factors that affect credit score
P - C - L - T - N

Answer 9

Payment history (35%)
Credit utilization (30%)
Length of Credit History (15%)
Types of Credit (10%)
New Credit Inquiries (10%)

Question 10

Credit Score Ranges
Indicates high risk for lenders

Answer 10

300-579 poor

Question 11

Credit Score Ranges
Average credit score

Answer 11

580-669 Fair

Question 12

Credit Score Ranges
good creditworthiness, and borrowers in this range are more likely to receive loan approvals with reasonable interest rates.

Answer 12

670 – 739 Good

Question 13

Credit Score Ranges
have a strong credit history and will
generally receive loan approvals with lower interest rates and better terms.

Answer 13

740 – 799 Very Good

Question 14

Credit Score Ranges
exceptional creditworthiness,

Answer 14

800 - 850 Excellent

Question 15

how to check your credit score

Answer 15

TransUnion Philippines:
CIBI Information, Inc.:
CRIF Philippines:

Question 16

Strategies for Building Good Credit

Pay all bills on time.

Keep credit utilization below 30%.

Build and maintain a long credit history.

Answer 16

Make Payments on Time
Keep Credit Utilization Low
Establish a Credit History Early
Diversify Your Credit Mix
Limit New Credit Applications
Diversify Your Credit Mix
Monitor Your Credit Regularly
Dispute Inaccuracies
Use Credit Cards Wisely
Become an Authorized User
Pay Off Debt Strategically
Maintain Open Credit Accounts
Avoid Maxing Out Credit Cards

Question 17

Focus on paying off the debt with the highest interest rate first, while making minimum payments on other
debts.

Answer 17

Avalanche method

Question 18

Debt Management
Rank your debts from smallest to largest balance.

Answer 18

Snowball method

Question 19

Combine multiple debts into a single
loan with a lower interest rate or more favorable terms.

Answer 19

Consolidate Your Debts

Question 20

Contact creditors to negotiate lower interest rates, reduced payments, or extended repayment terms.

Answer 20

Negotiate with creditors

Question 21

Find a Card with a Low Introductory Rate: Look for cards offering
0% interest for an introductory period.

Transfer Your Balance: Move your high-interest debt to the new
card.

Answer 21

Use Balance transfer credit card

Question 22

Part-Time Jobs: Consider taking on additional work during
evenings or weekends.

Freelancing: Use your skills to find freelance opportunities online.

Sell Unused Items: Declutter your home and sell items you no
longer need.

Answer 22

Increase income

Question 23

Non-Profit Organizations: Look for reputable non-profit
agencies that offer free or low-cost services.

Debt Management Plans: They can help you create a plan to
pay off your debts over time.

Answer 23

Seek professional help

Question 24

Taking on new debt while trying to pay off existing
obligations can make it harder to achieve debt freedom and
increase financial strain.

Answer 24

Avoid accumulating new debt

Question 25

Aim to save a small amount regularly, even if it’s just a few pesos.

Answer 25

Set Up an Emergency Fund

Question 26

Use unexpected sources of income, such as tax refunds, bonuses, or gifts, to make extra payments on your debt.

Answer 26

Use Windfalls to Pay Off Debt

Question 27

Break your debt repayment goals into smaller, achievable milestones.

Answer 27

Stay Motivated

Question 28

legal process that can discharge
or restructure debts when an individual is unable to repay them.

Answer 28

Seek Bankruptcy as a Final Option

Question 29

Debt settlement involves negotiating with creditors to settle your debt for less than the full amount owed, usually in a lump-sum payment.

Answer 29

Explore Debt Settlement (Last Resort)