By. Carlos Sanchez
The Basics of Credit
2. Types of Credit?: Types of credit include credit cards which are insued by your financial institution and personal loans by a lender.
3. Costs Associated?: Credit it not free! You must pay interest (APR).
4. How? And What determines Credit?: To gain a credit score, you must prove your creditworthiness by the the three C's through your credit bureau. Which gives you your credit score. They are character, capacity and capital.
Section 2: Volcabulary Watch.
2. Creditworthiness: Creditworthiness is based on the three C's which are Character Capacity and Capital. Which is as follows, Responsiblity of paying back debt, Financial ability to repay debt, and Value of what you own like personal items etc.
3. Personal Loans: Personal Loans is borrowed money that one has to pay back with interest and for the specific use of personal use. They are typically unsecured loans which are based on your credit score and your ability to pay.
Section 3: What You Need to Know About Credit Cards.
- What is a Credit Card: Credit Cards are issued by a financial institution or bank which is based on your credit rating.
- Where can you use them: You can use credit cards almost anywhere when you want to purchases something. Most cards have credit limits or the amount of time a financial institution will extend in order for you to pay your fees which include interest Rate (APR). You get a penalty fee with an annual fees if you don't repay your money that you owe.
- Benifits of Using a Credit Card: There are some benifits to using a credit card. Some simple benifits is that you just buy today and pay later which can be benificail if you do not have the total amount of the money you are buying. Sometimes you get Over-The-Limit fees if you keep buying things with a maxed credit card.