Learn everything about credit right now!
Basics Of Credit
Credit is the ability to obtain goods and services before payment, based on the trust that payment will be made in the future. There are 3 types of credit, Installment,revolving and open Installment credit is what you use to borrow money and you repay in equal amounts over a certain amount of time. Revolving credit allows you to borrow money as long as your credit score is good and you are able to pay it back in full or partially with interest/ fees. Lastly, open credit is the amount of money you borrow per month that has to be repaid in full by the end of the month. Credit comes with fees and the purchase of the goods your buying you also might have to pay APR, or an annual percentage rate. A persons credit depends on their creditworthiness. It also depends on if the persons pays their bills on time, if they have debt, and how long their credit history is.
Credit Score- A number based on how a persons credit is, can range between
Credit Bureau- A company that makes the credit scores available to credit companies.
Credit Report- A record of an individuals past credit history including payments and other information.
Creditworthiness- Trustworthiness with money based on a persons credit history.
Interest (APR)- Annual percentage rate on loans or credit.
Lender- Someone who lends money.
Credit Cards- A small plastic card issued by banks allowing people to purchase goods or services.
Personal Loans- A loan that is granted for personal use, can depend on the persons ability to pay the loan back.
What You Need To Know
Credit Limit- The maximum amount a credit card company will allow the cardholder to obtain.
Interest Rate- The money you have in the account is charged by a percentage.
Penalty Fees- Fees charged if you violate the terms of your cardholders agreement.
Over-the-limit fee- Fees that are charged when you exceed your credit limit.