What is Credit? How do you use it?

What do you use it for?

Credit

Credit gives you the ability to buy now.....and pay later, this can ether be done by credit cards or loans. Loans are mostly use to buy big items such as a car, or a house, and even to pay for schooling. Credit cards are comely use for smaller perches but we'll get back to that later on. But how does one get credit? You start getting credit as soon as you start paying for bills, this will get you Credit Score, your credit score ranges from 300 to 850, 300 being the bad and 850 being the best. Also to get credit you must demonstrate your Creditworthiness. When applying for a loan lenders will look at your Character, Capacity, and Capital these are the three C's off credit.

Credit Cards

I said I would be getting back to this. credit cards are a great way to build your credit score, every time you make a payment on time your credit score will improve not by a lot but hey it's better then nothing. A good things about credit cards is that they could basically be use everywhere, and you won't have to carry large amounts of money around. Many of the credit cards will offer you some benefits such as trailing miles, and or cash back.

Vocabulary Watch

APR- A interest rate of amount that a lender will give you when you take out a loan.

Penalty fees- A fee that you will get if your lee on your payment

Annual fees - A fee that you will have to pay to open a credit card