Credit Newsletter

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Section 1: The basics of credit

What is Credit ?

Credit is the ability to obtain goods or services before payment, based on the trust that payment will be made in the future


What are the forms of credit ?

Loan and Credit Bureau


Loan: Money that is burrowed and is expected to be payed back used in for paying school, car, and housing known as for personal loans


Credit: When a Lender is using money through credit cards usually from a bank for needs or things they want. The Credit Bureau usually check the credit history when Lenders request the Credit Report.


What costs are associated with Credit ?

To get Credit, you must demonstrate your credit worthiness

-Character, Capacity, Capital


Character: Sense of financial, responsibility, Dependability, Steady jobs, residence

Capacity: Financial ability to repay loan, High enough income, Major expenses and debt

Capital: Value of what you own, savings, investments, property, use capital to pay off loan if needed.


What determines when someone gets credit and how much they get ?

Credit Score and Credit Bureau usually determines how much the person will be given and if they are given credit.


Credit Bureau is where you will start every Credit Bureau has a record of every adult including:

  • Missed rent payment
  • Bounced Checks
  • Been sued
  • Bankruptcy

And if you are accepted for credit do you have the ability to pay your bills on time?


Credit Score is knowing how much credit you will earn the higher the better, and you will be finding out how much you earn depending on:

  • On time payments = good score
  • low debt = good
  • long history = good
  • Limited # of credit cards = good



Section 2: Vocabulary Watch

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Credit Score: A credit score in the United States is a number representing the creditworthiness of a person


Credit Bureau: A company that collects the credit ratings of individuals and makes them available to credit card companies, financial institutions, etc.


Credit Report: Credit history or credit report is, in many countries, a record of an individual's or company's past borrowing and repaying,

Section 3: What you need to know

What is a credit card ? A plastic card issued by a bank, business, for the purchase of goods or services on credit. Common cards: Visa, MasterCard, Discover, AMEX


where can you use credit cards ?

ATM


what are the benefits and cost of using credit cards ?

Some of the Cost of using credit cards are Over the limit, Annual Fee, Credit Limits, and Penalty fees.


Over the limit - Going over the limit

Annual Fee - Required Annual money you must pay usually the interest (APR) is 0% to 29%

Credit Limit - Max amount you can spend using a card you usually get credit limit when you don't have any credit history they give you a little and adds more money every month just tp see if you pay on time.

Penalty Fees - is an extra fee because of late payment over credit limit, returned payment etc.


Some of the Benefits of using a credit card is it allows consumers to purchase more good. The more goods people spend there credit on the more people they need to make it meaning more jobs. People who do have a good stable job are able to spend money.


Section 4: Smart Consumers.

People will either take advantage of there credit and spend it on things they DON't need or People will choose wisely and spend there credit on things they DO need. You don't wanna be that one person who takes advantage and ends up paying fees and debt rather than spending it on goods just because you can't keep up paying every months for fees of credit. So just remember when you are about to spend think to yourself and think that the item you want is worth it and that you will be able to pay if off next month in your fees if you can't then your looking either at debt or penalty fees. Do not overuse your credit because you will fall into debt so spend your credit wisely either on schools, car, housing etc.