Build Your Credit
Jessica Padilla Ms. Paulin P.10
Section 1: The basics of credit
What is credit?
- 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?
- 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
The ability to borrow money in return for a promise of future payment.
A record of a person's credit history, late payments, credit accounts, and loans. Determines their creditworthiness.
An organization or person that lends money.
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.