What is 'financial literacy' and why is credit score important for young adults? Name two actions to build credit responsibly.

• A. Understanding personal finance; a credit score affects loan terms and housing; actions: pay on time and maintain low credit utilization.
• B. Understanding personal budgeting; a credit score affects tax rates; actions: carry high balances.
• C. Understanding personal finance; a credit score affects insurance premiums; actions: close old accounts.
• D. Understanding personal budgeting; a credit score affects loan terms and housing; actions: invest aggressively in stocks.

Answer: (D)