by: Angie Nicasio
The basics of credit
Section 2: vocab watch
A number that representing the likelihood of a person to pay his or her debts. Many companies will look up an individuals credit score to see if the person will pay or not. (for example: when someone wants to buy a car)
These loans are granted for personal use, like to buy a new TV or because you need a little extra cash, as opposed to business or commercial use. Many of these loans are secured by a co-signer, meaning that if the person that took out the loan does not pay, the co-signer is responsible for that payment. Repayments are usually fixed payments over a fixed amount of time.
A credit bureau is an agency that collects individual credit information and sells it to creditors so they can make a decision on granting loans. A credit bureau does not determine whether an individual qualifies for credit or not, it only collects information in the history of a persons credit habits. A credit bureau is also known as a consumer reporting agency or credit reporting agency.
Section 3: Credit cards: what you need to know
section 4: Don't fall into the credit card trap
There are many ways to keep yourself safe when using a credit card:
- Pay your credit card bills on time
- Stay well withing your credit limits
- Do not take on too much debt with MANY different credit cards
- DO NOT use your credit card to make every purchases (ex. food, clothing, gas). Using your credit card as a substitute for cash can quickly lead to debt.
- Pay as much as you can on your bill each month. Not only minimum-only payments.