Knowledge For Credit
To determine if you're eligible for credit, you or the lender you're approaching for a loan can request your credit report from a credit bureau. On the credit report will be your financial history and your overall creditworthiness - how dependable you are when it comes to paying back loans. Your credibility will be expressed in a credit score on a scale of 300 to 850. The higher the score the better. Your credit score will also determine your interest or APR rate. The better your credit score the lower your rate.
Important Vocabulary You Should Know
Capital - The things of value owned
Capacity - Income vs. Debt, the ability to pay off loans
Character - The person's sense of financial responsibility and dependability
Credit Cards: What You Need To Know
Annual Fees: an amount to be payed by the cardholder every year
Credit Limit: the amount the cardholder cannot exceed each billing cycle
Interest Rate (APR): a percentage to be payed on each bill after the grace period, determined by the cardholder's credit score
Penalty Fees (including over-the-limit fees): fees to be payed when the conditions of the card are not met, such as an exceeded credit limit or an overdraft
How To Get Good Credit Score?
Knowing your credit all comes down to numbers, the higher the numbers the better your credit is and we all want great credit so reach far for those numbers and pay your loans. All these factors listed below make up what is called your credit report that every company looks at when you are signing up for a loan/credit card. Your credit score says a lot about you and can be difficult to repair once it has been damaged so always pay on time.
Actual credit scoring:
300-850 (the higher, the better)
- on time payments= good
- low debt=good
- long history=good
- limited number of credit cards=good
TIPS TIPS TIPS !
- Choose a card that best fits your needs
- Pay your bill in full and on time each month to avoid interest rates and debt
- Understand the terms and conditions of your credit card
- Set a budget and stick to it
- To avoid unauthorized credit card use, only make purchases with sellers you trust, shred paper documents, and don't keep your credit card information on your phone
- Always check credit report