The basics of credit


Credit is a system of which customers may obtain goods and services before payment.

Types of credit: Loans let you borrow money that must be repaid with interest

Installment loans were made for a fixed amount at the time of your application

And approval. This type of loan is repaid in fixed monthly payments over a specific period of time.

Credit cards are perhaps the most common type of personal credit.

The costs of credit are having to pay back the loan in a certain amount of time with a certain amount of interest too.

The thing that determines your credit is basically you, do you always pay your bills on time and how many loans have you taken out and did you pay back in full with interest. The more you use your credit card and pay back your credit score goes up slowly over time which earns you more money in credit.

credit vocabulary

  1. Credit Bureau- a firm that investigates the creditworthiness of and assigns a creditrating to a client's customers or potential customers.
  2. Credit Card-a card that identifies a person as entitled to have food, merchandise,services, etc., billed on a charge account.
  3. Credit History- your lifes list of stuff you baught loans bills everything to determine your credit score,.
  4. Credit Limit- the ammount of money you can have on a card or loan.
  5. Credit Rating (Score) you number given to you on your actions threw life.

Section 3: Credit Cards: What You Need to Know

A credit card is basically like a loan of money on a card you can use it to buy stuff but you have to pay back within a certain amount of time. If you don't pay back that's how you make your credit score go bad.

You can use credit cards basically anywhere stores gas stations hotels malls.

The benefit is having back up money in case of an emergency and the cost is hurting your credit if you don't pay it back at the certain time it's due.

Section 4: Smart Consumers: Don’t Fall Into the Credit Card Trap

The best thing to do is to only have 1 credit card. The reason for this is because you dont want yourself to get caught up in debt or end up not paying them back. also use it once and a while and pay it back quickly so your score goes up over time since you pay back on time.