What you need to know about credit
What is Credit?
Forms of Credit
What Determines if Someone Gets Credit and How Much They Get?
Words You Need to Know
● Credit Score- number based on your credit report (determines rates)
● Credit Bureau- a company that gathers credit information on individuals for a variety of reasons
● Credit Report- get to see balances, credit score, number to determine loans. ( alerts.equifax.com, experian.com/fraud, transunion.com )
● Credit worthiness- history of payments
● Interest (APR)- yearly cost for the things you pay for (late = higher APR)
● Lender- an institution or individual who loans money to a borrower
● Credit Cards- good way to start establishing credit- ensures that you are able to get bigger loans later in life
● Personal Loans- a loan that establishes consumer credit that is granted for personal use
Questions to Answer
Where can you use credit cards? You can use credit cards anywhere that accepts them, such are Wal-mart, Best Buy, and thousands of other places.
What are the benefits and costs of using a credit card? A benefit of having a credit card is establishing credit. Credit enables you to get loans and jobs. If you don't pay on time your credit starts to go bad, and you have to pay more for your purchases.
More Terms to Know
● Credit Limit- total amount of money you are allowed to borrow
● Interest Rate (APR)- yearly cost for the things you pay for ( late fees = higher APR)
● Penalty Fees- fees you pay if you are late paying your bill
● Over-the-limit fee- a charge you get for going over the limit on your credit card
Credit Card Tips
- Don't buy something you can'y pay back in 25 days
- Use a secure browser for internet purchases
- Don't share your information with someone
- Know what you are signing
- Use your credit card for necessities
- Pay on time