Credit

By Hugo Lemus

What is credit?

Credit is when you borrow money from a lender for good or service you need. you need to pay back all the money you borrowed plus an interest set by the lender.


What are the forms of credit?

There are four forms of credit. Revolving credit are credit card they give you a limit of money you can use and charge you monthly with interest(APR) the money you use on the credit card. Then there is Charge cards seem to be like a Revolving credit but the only difference is that in charge card you pay the total debt every month. finally you have your Installment credit, it is basically a personal loans, car loan, house loan. This type of credit are a bit hard to get because it usually has a lot of money involve. you would need to have fair or good Credit Score. They will get a Credit Report on you.


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What costs are associated with credit?

There are four forms of credit. Revolving credit are credit card they give you a limit of money you can use and charge you monthly with interest(APR) the money you use on the credit card. Then there is Charge cards seem to be like a Revolving credit but the only difference is that in charge card you pay the total debt every month. finally you have your Installment credit, it is basically a personal loans, car loan, house loan. This type of credit are a bit hard to get because it usually has a lot of money involve. you would need to have fair or good Credit Score. They will get a Credit Report on you.



What determines if someone gets credit and how much they get?

A person's credit score is extremely important, as it determines his or her eligibility for all kinds of financial endeavors, such as credit cards and home loans. Some people have difficulty adjusting their scores because they are not sure what the number is based on. A specific formula is used to determine the score, and it's based on whether the person pays bills on time, how much debt he or she has, the length of his or her credit history, how many new accounts the person has, and the diversity of the credit accounts. Knowing what criteria go into the number on a credit report can help a person maintain a good score and qualify for higher limits and better rates on loans.

A credit score may be anywhere from 300 to 850, with 300 being the most risky and 850 the most secure in the eyes of lenders. Therefore, a higher number will qualify an applicant for a better loan rate. A person with a number under 500 is unlikely to be able to secure any type of loan.



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What is a credit card?

A credit card is a method that a loaner give you money so you can buy goods or service you need. you have a credit limit every month that you can’t go over or you will be charge Over-the-limit fee. That are fee you need to pay set by the credit card company also known as penalty Fees. they also have a Interest Rate (APR) for using the credit card.
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Where can you use credit cards?

you can use it anywhere they accept debt card or credit card


What are the benefits and costs of using credit cards?

the benefits of a card is that when something comes up that you didn’t plan for it can help you. but the cost of it is that you will have to pay all the money fast or you will be in credit debt and end up paying double what they paid with the credit card.


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Credit card are useful when there is a emergence and you don’t have the money to pay but you know you will be able to get it in a month. so don’t use the credit card for “wants”. Thats how people get in credit debt and end up paying that debt for years. So if you can’t buy it with your own money i recommend to not get a credit card.