The Money Book for the Young Broke and Fabulous by Suze Orman

The Money Book for the Young, Fabulous & Broke by Suze Orman

1. Explain FICO Fundamentals.

Your FICO score is a 3 digit number that determines the interest rate you will pay on your credit cards, car loan, or home mortgage as well as whether you will be able to get a cellphone or have your application for an apartment accepted. FICO stands for Fair Isaac Corporation. A high FICO score will you give you a good reputation in the business world. It can even affect getting your job.

2. Explain the 5 key areas that affect your FICO scores.

The 5 key areas that affect your FICO scores are your 1.payment history (35%), or how you pay back your debts, 2.credit utilization (30%), or the percentage of available credit that has been borrowed, 3.length of credit history (15%), or the length of time each account has been opened, and 4 &5.new credit and credit mix (10%) each, or how new you are to credit compared to how much credit you open, or the variety of debt you repay indicating that you may handle all sorts of credit.

3. According to Suze Orman, what is the formula for determining if a purchase is a

Good or bad use of credit?

Suze Orman says to look at credit in the way of necessity vs. indulgence. Buying groceries so you don’t go hungry is a good use of credit, but spending it on a night out with friends is a bad use.

4. What is the strategy Suze Orman advises if you have hefty balances on credit cards

In order to pay them off?

She advises to pay the minimum balance on all five cards, and