Basic of Credit

Basic of Credit

Barrowing money from the bank and getting interest on it and paying them little by little. If you pay your credit on time which will cost you to have a good credit score which means that you can lend loan from the bank.

There is many form of credit such as student loan, House loan, car loan, and personal loan which allows you to loan money whenever you need to it doesn't have to be a good reason.

The association cost with credit is that you have to pay annual fees which is what you pay every year for using your credit, you also have to application fees or late fees that apply. But some credit do not have annual fees.

What determines if someone gets credit is your credit score, Credit score which is a number that represent your creditworthiness, which is also based on your credit report which is a negative record of any company you borrowed money and didn't pay back and this is sourced from credit bureaus which look into your credit information and decides how much loan you can take out.


Vocabulary

Grace Period: The time that past the deadline for an obligation during which a penalty that would have been imposed is a waived.

Credit Limit: The maximum amount of credit that a financial institution or other render will extend to a debtor for a particular line of credit.

Annual Fees: A fee you pay yearly by credit grantors privilege of using a credit card.


Credit Cards

Credit Card is a card which is issued by the bank and business. You can buy products with your credit cards instead of carrying cash around. Its safer to carry credit cards around than money because if someone steals your credit card you can cancel so no one can use it. You can use you credit card on everything you want. You have to make sure that you don't spend a lot of money and spend your over-limit, otherwise you have to pay penalty fees. The use to credit card is directly connected to your credit score. If you make a purchase with your credit card will give you a degree of theft protection.

Tips while using credit cards

  1. Do NOT give your credit card number over the phone unless you've initiated the call
  2. Never write your account number outside the envelope
  3. Make a list of card numbers and their expiration dates
  4. Only carry the card you need
  5. Do NOT give your card PIN number to anyone