By: Tyler Eggers
Basics of Credit
Credit is the ability to borrow money in return for a promise of future payment. You but now, and pay later. There are two types of credit: Personal Loans and Credit Cards. Personal loans are used for home, car and school, while credit cards are used for smaller objects like groceries and clothes.A Credit Bureau is a company that send your credit rating to credit card companies and financial institutions. A credit card company will determine if you're Creditworthy by looking at your Credit Report and Credit score.If the company accepts you and sees you pay back on time, then they will become your Lender. A bad credit score can be bad and follow you for years. Ex. finding a house or job.
If you are not creditworthy it will be hard to get credit. If you were bad at repaying last year but now pay back all the time and on time this year, it won't matter. Companies will still look at that and wonder if you are creditworthy and have less a chance. Credit is good and important to have because if your have to pay for something immediately that you might need soon, you can use credit and pay back later.