The Importance of Credit

Alyssa Vasquez 2A/Macewich/12-4-14

Credit

The ability of customer to obtain goods or services before payment, based on the trust that payment will be made in the future. You can use credit to purchase goods and services when you need them. The amount you spend is the amount you must pay back.


Sometimes you can harm credit without even know it. Credit reflects your trust and individual behavior regarding managing your finances, especially borrowing and repaying. Some jobs check your credit to see if you are actually qualified for the job. Also starting a business, buying a car, get lower interest rates, also buying a house. Credit can have a huge impact on your life. Having Good credit can show that your financial situation and the rest of your life is going on the right track.

Credit Score

A number assigned to a person that indicates to lenders their capacity to repay a loan.


When you apply for credit, lenders will check your credit score. Credit score shows people how likely you are to pay something back. If it is good you can get the amount you are trying to borrow. Also Credit Score determines if you can get credit for loans or credit cards. It is used to determine what loan you qualify for, how much credit you can get, and what your interest rate will be.

Improving your credit score

  • Pay down your balances and keep them low.
  • Eliminate Nuisance Balances.
  • Leave good old debt on your report.
  • Use your calendar.
  • Pay Bills on time.
  • Don't hit at risk.
  • Do not Obsess.
  • Check your credit report.
  • Actually pay off your debt.

Maintaining a good credit score

  • Keep track of your spending.
  • Do not exceed your limit.
  • Have an emergency fund.
  • Pay what you owe.
  • Sign up for automatic payments.
  • Be organized.
  • Do not close old credit cards
  • Check your credit score often.
  • Manage your debt.