What Is an Advantage of Having a Good Credit Score

question 92

Multiple Choice

What is an advantage of having a good credit score?

• A)You have never been in debt.
• B)It is easier to get credit in an emergency.
• C)You will be making money for yourself rather than someone else.
• D)You won't fall into perma-debt.

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Definitions:

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or real yield on an investment.

Inflation Premium

The additional interest rate that lenders demand to compensate for the loss of purchasing power of money due to inflation.

Yield Curve

The relationship between interest rates and the term of debt, generally expressed graphically. A normal yield curve is upsloping, reflecting rates that increase with increasing term. An inverted curve is downsloping.

Liquidity Premiums

Additional yield that investors require for holding securities with lower liquidity.