Credit Newsletter

By: Frank Isovski

Basics of Credit

What costs are associated with credit?

Not everyone gets accepted to have credit you have to have creditworthiness or be know to be responsible by the credit bureau for a company or bank to barrow you money. You either get the money you barrow on a credit card but for loans it's in different forms.When alender like a bank or a business barrows you money you have to pay it back on time and that will bring your credit score up so that the next time you barrow money you have more. With the money that they barrow you they charge you a % in interest (ARP) so that they can make money off of you. Once a year or so you can ask for a credit report or you can ask for it with a fee. This is a report of what you have used the borrowed money for and who you barrowed money from. Personal Loans are loans given to you to buy big things like a house, car or to pay for school this is also called credit


Creditworthy: You have to be creditworthy for companies and banks to lend you money you have to know the three C's because this is what you are considered from. Capital is the value of what you already own. Capacity is what you can handle to pay according to what you make at work. Character is how responsible you are financially.

Credit Report: even if you haven't done anything that could have changed your credit score you should check it once a year because someone can be using your name and steeling your identity.

Annual Fee: you have to pay no matter what it is not a penalty or anything its just what you pay to have your credit.

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Credit Cards: What you need to know

A credit card is a plastic card issued by a bank or business for you to buy goods or services on credit. You can use credit cards depending on what ones they are, almost anywhere that you purchase things. When you use credit cards you earn creditworthiness so that when you want to buy a car house or pay for school the banks loan you money. You also get charged annual fees when you are using credit cards but they are not that much. They also charge you a interest rate (APR) to make money for them selves and to make sure you pay them back or it will keep adding up. When you get a credit card you have a credit limit that you can use depending on how responsible you are to pay them back. When you go over the limit they give you, they charge you a over-the-limit fee. They also charge you an additional fee because of late payments, over credit limit and returned payments this is called a penalty fee.

Don't Fall into Credit Card Trap

When you are using credit cards there is smart credit and dumb credit. You should know what and what not to use your credit card for. You also need to know how to handle it you need to spend only what you know you can pay back and you should keep track of paying it back or it will keep adding up and your (APR) will go up.

Smart Credit: House,Car,School

Dumb Credit: Fast food, things that make you feel better, Little things (they add up)