Credit Project

By: Adrian Chavez

Basics of Credits

Credit is a form of payment that requires you to pay off a debt to the bank in exchange for the money used to get the item or service. A form of credit may be personal loans such as for a car or college. In these types of credit a sum of money is lent to a person by a lender, usually a bank, and interest is added to the total. The interest can fluctuate price and the day you have to pay based on your contract.

Another form of credit is a credit card, this is the most common version of credit. It has repeated translations depending on your credit limit. Each time you buy something it is money that is being borrowed until you pay it off. Interest is also added on the time you take to pay it off. The benefits of credit is being able to afford something at the moment and being able to pay it off later.

The key factor to determining someones creditworthiness is their credit score. If a person who filed for a loan is not punctual with payments or doesn't pay his payments then they will be seen as a risky lend and also might have a low credit score. Anything in between 300 through 850 is seen as a good credit score. The card company will also look into the persons credit history, how much debt they have, and the diversity of credit accounts they have with the help of the credit bureau. An organization established to keep the credit records of people.

Credit Cards

Credit cards allow you to borrow money from the bank to make your purchases. A credit card comes with annual fees that you have to pay yearly for anything you didn't pay off in one of the months of that year.

You are given a certain amount of days called "Grace Periods" to repay your debt without having to pay the extra interest, a percentage of what you owe added to what you already owe! You will also have to pay the late payment fee for not being able to pay off the debt. Their are a lot of positives that come along with owning a credit card. Like being able to make large purchases and paying them off in small chunks.

If you also play it right and responsible you can build good credit score. Credit score is the range of how much of a reliable person you are for paying off your debts, but you can also build bad credit score on doing the opposite of what a responsible paying American would do. This then digs you into a hole of debt and being seen as an unreliable investment. Most people do this by overspending because they have the ease of owning a credit card. Most people will forget about their credit limit and then be charged for the over-the-limit fee for spending too much that month. You could use a credit card almost anywhere where they accept payments in card form, so shopping centers, food establishments, rental companies, hotels and inns, and an establishment of services.

How Not To Dig Yourself Into A Hole


  1. pay off the balance in full at the end of the month
  2. pay on time to avoid extra fees and increased interest rates
  3. limit amount of credit cards
  4. read fine print
  5. record purchases done with cards


  1. Don't use for food
  2. don't take cash advances,they don't have grace periods and interest is still added
  3. Don't buy what you can't pay back