The Basics of Credit

Mrs. Leonard Taught me EVERYTHING i know about credit!!:)

Section 1 :)

What is credit?

  • makes buying big things easier to buy
What are the forms of credit?

  • Loans, installement loans, credit cards
What costs are associated with credit?

  • Interest, annual percentage rates, fees
What determines if someone gets credit and how much they get? The 4 C's

  • Character - what kind of person are you? irresponsible or responsible?
  • Capacity - are you able to pay back?
  • Creditworthiness(are they able to trust you with past history) - whats your credit history?
  • Collateral - they can take things away from you

Section 2 :)

Credit Score - Number based on the credit you have, determines basically everything

Credit Bureau - Credit ratings of individuals, financial institutions

Credit Report - Websites that tell you whats you credit number

Interest APR - Yearly cost of money you have borrowed

Lender - Organizations that lend money for house payments or more

Credit Cards - Plastic card issued by banks to purchase anything you want

Personal Loans - Loans you need for personal reasons only

Section 3 :) Credit Cards

What is a credit card?

  • Cards that helps you buy mostly anything
Where can you use credit cards?

  • Anywhere they accept them, which is everywhere
What are the benefits and costs of using a credit card?

  • Huge advantages for paying things online or when running low on cash, costs are running over you limit and now you have to pay pack.

Section 3 :) Vocab

Annual Fees - How much percentage rate you are charged every year

Credit Limit - Limit how much you can borrow

Interest Rate - How much you being charged to use your credit card

Penalty Fees - How much your charged if you dont make your payments on time

Over-The-Limit Fee - What your being charged when you overpass you limit

Section 4 :) Tips

  • Sign your card
  • Put "SEE ID" on back of card
  • Dont max out
  • Keep track of what you charge
  • Pay on time