Credit

The ins and outs of the credit world

The Basics of Credit

  • Credit is when a person is able to obtain goods or services before payment will be made in the future. Or a loan to pay the bank back.
  • Some forms of credit are credit cards, student loans, house loans, car payments, etc.
  • Some costs associated with credit are more expensive items that you do not have the money for immediately like a wedding ring, house, college, or a car.
  • A persons Credit History determines if they get credit and how much.
VOCAB

  1. Credit- A loan from the bank you are expected to pay back
  2. Credit Score- a number assigned to a person that shows lenders their capacity to repay a loan.
  3. Credit Bureau- a company that collects info relating to the credit ratings of a person and shows them to credit card companies
  4. Credit Reports- shows a persons borrowing and payment info
  5. Creditworthiness- determines if a person is responsible enough to get credit
  6. Interest(APR)- annual or annualized percentage rate of interest on loans or credit
  7. Lender- the person lending out the money or loan
  8. Credit Cards- Gives someone a card to use credit on the go or online
  9. Personal Loans- loans for you to do things to help yourself


Vocabulary Watch

  • Capital- all the values of what you own
  • Character- how you are with paying off your loans and debts
  • Collateral- Financial responsibility, makes sure you can take care of yourself with a job


Smart Consumers: Don't fall into credit card trap

  • Don't use it too much
  • Use for emergencies only
  • Research and pick a good credit card for you
  • Keep up on any fees or payments
  • Don't ignore notices
  • Create plans and budgets for yourself to follow


By:

Emily Reed