Credit Project
Mike Wilms
The Basics of Credit
In order to build up your credit score, you need to start using a credit card at a young age. If you have a higher credit score, you will have more creditworthiness. The credit bureau is a company that collects the information of your credit so it can be available to credit card companies. The credit bureau and your credit report determine how much credit you get.
Some different costs and benefits that are associated with credit are interest and a lender credit. Interest is also known as the annual percentage rate (APR). This is the percentage of money you owe the bank or credit card companies when you spend their money. A lender is the person basically pays for what you buy when you swipe your credit card, until you pay them back. An example of a lender is Visa. Visa is a type of credit card that lends you money to spend, if you cannot pay it back then they increase rates so you have to pay a lot more. Another benefit of credit is a personal loan. This is when you borrow money from the bank so you can buy something like a car, or some new furniture.
Credit Score
A numerical expression based on a level of analysis of a person's credit files, to represent the creditworthiness of a person. Credit scores range from 300 to 850, with higher scores being better.