Build Your Credit

Jessica Padilla Ms. Paulin P.10

Section 1: The basics of credit

What is credit?

Credit is:

  • Ability to borrow money in return for a future payment.
  • Known as "buy now, pay later."
  • Not free.
  • Interest is required.

What are the forms of credit?

  • Student loans
  • Home loans
  • Credit cards
  • Personal loans

If you decide to go get a loan you have to talk to a lender. The lender has the right to decide if your creditworthiness by checking the credit bureau.

What costs are associated with credit?

  • Utilities
  • Personal items
  • House payments

You could build up the interest rate you owe if you don't pay it on time.

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

  • How high your credit score is
  • People with credit should get a credit report. It keeps track of their spending with their credit

Section 2: Vocabulary Watch

Section 3: Credit cards: What you need to know

What is a credit card?

  • Plastic card that contains money
  • Given to you by the bank
  • If new, they set a credit limit on it

Where can you use credit cards?

  • Used everywhere
  • Need access to a machine/cash register
  • If used irresponsibly, WILL receive a over-the-limit-fee

What are the benefits and costs of using credit cards?

  • Annual fees: how much money you spend with that card over the year
  • Interest rate: amount payed. Also known as APR
  • Penalty fee: penalty if you miss your monthly payment
  • Good credit score-Help you get loans and a new job

Section 4: Smart Consumers: Don't fall into the credit card trap

Smart ways to avoid low credit:

  • Think of the future. Can't buy it? Don't pay for it.
  • Pay entire fee, not minimum fee. That is when penalties are started.
  • Bad shopper? Get a limited credit card.
  • Fee if you go over the limit. About $30. Don't go over the LIMIT.