Learning about credit by Angel Rogers pd:1 west

The obvious question What is credit?

  • The ability to borrow $$ in return for a promise of future payment
  • aka “Buy Now…Pay Later”
  • There are two forms of credit: loan and people's favorite credit cards!
  • You can use them for your house, car and school.
  • You know talk is cheap but credit isn't free!
  • Your creditworthiness is when you demonstrate that your credit is worth it
  • For example you have to make sure you're able to repay a personal loan
  • The "lenders" will judge you on your worth with by you demonstrating 3 things
  • Capacity the income you have, and your major expense and credit
  • Character-having common sense of handling money,are you trust worthy,steady job, and residence must be long term
  • Capital- your values, saving, interest, property
  • Your credit score is the higher you go the better the score
  • Credit bureau is when the consumers' credit info is collected and sold
  • Don't forget about your interest (APR)
  • Last but not least your credit report lets you know what you're spending your money on uh oh betcha you don't want to see that

Words to know

What you should know when credit involve

1. credit limit- Your credit does have a limit to it. Say when you first get your credit card the bank will put $ 500. That's all the money you have for right now. If you show the bank that you can pay your bills on time your credit will go up and so would your score.

2. Credit history- Yes everything has a history including your credit. That means it shows what payments that you've made in the past and the things you buy.

3.Collateral- That's really important because if you have something value the lenders can take that away. (Lenders are people that lend you money).

Warnings about credit and what is a credit card

Let's start with the obvious first. I know the girly girls and fashion models know what a credit card is because they are the ones who end up with 5000 of them. But that's just an estimate they probably got more than that. Anyway for the people who don't know what a credit card is it's a plastic card provided by the bank or a business that allows people to buy goods and services. But be careful though. Your card has a credit card limit. If you don't pay your bills it will travel month to month and with that comes an annual fee. And you're interests rate will go up the more your credit becomes bad. If your fee becomes over the limit fee you're in big trouble. That means you didn't pay the fees that come with the bills you had the pay and you went over your credit card should allow.

Don't get caught up in the trap

Now I know you shoppers love credit cards but wait a minute. Just because you have to shop that doesn't mean that you can drop anything. But the biggest thing you can't allow yourself to do is don't accept candy from strangers. In this case credit cards. What the lenders aren't telling you once you buy a credit card your credit is already going down while they get paid by you filling out the forms that they get you to sign. And don't be that person that you messed your credit so bad that you can't afford to get a house or go to school. You can always watch your spending and if get a credit card ask questions. Make sure it's the real deal. Or better yet ask your parents about getting you a low budget credit card. That way you have a better understand how credit works from someone you know best. So be careful and be on time with your bills and have fun.