Description Respond to the following scenarios. ———————————————————————————————————————————————————— Scenario 1 You want to purchase a new vehicle and you have your heart set on a brand new SUV. You take out a loan to pay for the car, but after six months you begin to fall behind on payment and incur late fees. Does your credit score go up or down? Why does it go up or down? If your score goes down, how can you fix it? ———————————————————————————————————————————————————— Scenario 2 Mark and Ryan just moved into their first apartment together and they want to buy a flat screen TV for the living room. They both work but between college tuition, books and rent their funds are running low. Mark decides to take advantage of a financing offer from a local electronics store and buys the TV on a line of credit Is this a good or bad debt move? Why? ———————————————————————————————————————————————————— Scenario 3 Nora has heard that opening a lot of credit card accounts is a good way to build credit. She currently has five cards but is sometimes forgetful in paying her bills on time and usually has a balance on each card. Her favorite store is offering a $50 coupon on her next purchase, with the promise of more coupons in the future, if she opens a credit card. She decides to open the store credit card to get the discounts. Is this a good or bad debt move? Why ———————————————————————————————————————————————————— Scenario 4 You just got the keys to your first apartment. You also have a new credit card with a $4000 limit and you use it to furnish your new place. Before you know it, you’ve bought a TV, a couch and a dining room table When you get the credit bill, you realize you’ve spent your full credit limit of $4000. Does your credit score go up or down? Why does it go up or down? Was this a good decision? Why or why not?
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