Section 1: The Basics of Credit
● What is credit?
The ability to obtain goods or services before payment, based on the trust that payment will be made in the future
● What are the forms of credit?
The forms of credit are by credit cards and loans.
● What costs are associated with credit?
Credit cards are free but you must pay interest.
● What determines if someone gets credit and how much they get?
In order to get credit a person must demonstrate their creditworthiness. Lenders judge using three factors character, capacity, and Capital. They obtain this information from a Loan application and the credit bureau. A person then gets a credit score between 300 & 850, the higher the better
Section 2: Vocabulary Watch
Credit- The ability to obtain good or services before payment, based on the trust that payment will be made in the future.
Credit Bureau- A company that collects the credit ratings of individuals and makes them available to credit card companies, financial institution, etc.
Credit History- A record of an individuals or company's past borrowing and repaying
Section 3: Credit Cards: What You Need to Know
● What is a credit card?
A credit card is a plastic card issued my a bank or business that can be used for the purchase of goods and services.
● Where can you use credit cards?
You can use a credit card anywhere where its accepted.
● What are the benefits and costs of using credit cards?
The benefits of using a credit card can be that you build your credit score and with time it will be easier to get accepted for things such as home or a car. Some costs of using a credit card can happen if you go over your credit limit you will get a over-the-limit fee. You can also get penalty fees for doing late payments and going over credit limit and increase Interest Rate.