The Use Of Your Credit Responsibly
The Basics of Credit
There is two types of credit that you must know, there's credit cards and loans. With credit, you will need to pay an interest, since it's not free. This means that you will pay an annual percent rate every year.
What determines if someone gets credit and how much they get is by their creditworthiness,meaning if you have the ability to pay back a loan. Character, Capacity, and Capital are 3 factors that lenders look for when it comes to letting someone borrow money.
Credit Bureau is is when information is being collected on consumer's credit and sells. This has a credit of every adult that has credit. It records if you've missed a rent payment, if you've been sued, if you have gone to bankruptcy, etc.It also assigns you credit rating, your score. The number that reflects your creditworthiness and if you have the ability and the willingness to pay everything on time.
Credit Cards: What you NEED to know
Smart Consumers: Don't fall into the Credit Card Trap
Just because the credit cards give you more opportunities to spend more money doesn't mean that you are going to exaggerate. When it comes to having a credit card, you must choose a card wisely. Pick a card that has a least expensive and that gives you more benefits. It's better if you only have 1-2 credit cards.Avoid having too many because you can get into a big trouble and you will probably end up paying a lot of interest. Every time you use your card, make sure you read the terms and sign after you agree.
Interest (annual percent rate) - A yearly fee charged by credit grantors for the privilege of using a credit card.
Creditworthiness-the reliability to pay back a loan