Credit Newsletter

By: Teresa Ramirez

Section 1

Credit is the ability to borrow money in return for a promise of future payment. Credit is not free. You must pay interest (APR). To get credit you must demonstrate your credit worthiness. Lenders judge this using three factors: character, capacity, and capital. Credit Bureau has a record of every adult. Check for things like missed rent payment, if you've been sued, bankruptcy, etc. Credit score is a score between 300 and 850. The higher the better. Credit report is your credit information and score. It is provided by Credit bureau and requested by lenders. A credit card is a plastic card issued by banks, businesses, etc., for the purchase of good or services on credit. A personal loan establishes consumer's credit that is granted for personal use. Usually unsecured and based on the borrower's integrity and ability to pay.
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Section 2


  • Someone who signs a loan with the borrower, accepting legal responsibility for paying the debt if the borrower default or does not pay.

Credit references

  • People who will recommend the credit applicant as a good credit risk.

Finance charge

  • The total cost to use credit, including interest, loan fees, and credit insurance.

Section 3

A credit card is is a plastic card issued by banks, businesses, etc., for the purchase of good or services on credit. You can use your credit anywhere! Annual fee is a required amount of money you must pay ($15-$100). Interest rate is 0% - 29%. No interest if you pay the entire balance by due date. Credit limit is the maximum amount you can spend using your card. Over the limit results in declined or penalty fee. Penalty fee is an additional fee due to late payment, over credit limit, returned payment, etc. Over-the- limit fee is an additional fee due to going over credit limit.
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Section 4

Here are some ways to stay safe while using credit cards. You should consider a loan as opposed to using a credit card. Interest rate may be lower. Pay credit card balance in full, in other words, avoid minimum payment trap. Choose card wisely. The less expensive it is the greater the benefits. Avoid too many cards, it's easier to pay in cash. Avoid bankruptcy and identity theft. Don't miss payments if you want to avoid fees. If needed seek credit counseling.