Credit Newsletter

Section 1-4 (Martin Tenev, Zlatomir Todorov)

The Basics of Credit

Credit is the Ability to obtain goods or services before payment, based on the trust that payment will be made in the future. There are different types of credits, including secured loans, unsecured loans, installment loans, and credit cards. The main problem is that you not only have to pay them back, but also with interest. Your credit score determines if someone gets credit and how much they get.

Your credit history will probably go to a credit bureau, which collects credit ratings of us individuals to make them available to credit card companies. If you do have a good credit score, and everything is good with the credit bureau, then you also will have a lot of creditworthiness, which is trustworthiness based on a persons credit history. If you have everything under control, then most likely a lender will be willing to give you credit.

Vocabulary Watch

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

Creditworthiness: Trustworthiness with money as based on a person's credit history; a general qualification for borrowing.

Personal Loans: A loan that establishes consumer credit that is granted for personal use; usually unsecured and based on the borrower

Credit Cards: What You Need to Know

A plastic card issued by a bank, for the purchase of goods or services on credit is called a credit card. For some credit cards you don’t’ have to pay an annual fee such as the Citi Diamond Preferred card. However all credit cards have Credit limits and an Interest rate(APR). You usually pay penalty fees for a late payment or if you go over-the-limit. You can use credit cards just about anywhere to pay your bills and purchases. The benefits are that you don’t need to carry cash with you.


While using a credit card you should annually get a credit report from the credit bureau in order to prevent fraud or identity theft. You should also always make sure you pay on time and don’t go over the limit because you will be fined.