How to receive Credit:

By: Norma Herrera

The Basics of Credit

Credit is the ability to borrow money and pay in the future. There is many different forms of credit. You can receive credit on personal loans such as home loans, car loans, student loans etc. You can also receive credit on credit cards like low limit cards, prepaid, or cards from the stores. But credits aren't free you have to pay interest. The credit bureau keeps records on all your credit payments or if you missed a payment etc. All this credit report gives you your credit score, the higher the score the better.

The four C's:

Not everyone could receive credit you must have a good character, capacity, creditworthiness,and know that collateral could happen to you. To have a good character you have to be responsible, have a steady job, and are dependable.You have to have the capacity to pay back your loans. You have to demonstrate creditworthiness on your reliability to pay back a loan. Finally you have to know that collateral is when they take your valuables away if you can't pay your credit.

Vocab:

Annual Percent Rate- is an annual rate that is charged for borrowing; its expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan

Lender- An organization or person that lends money


Credit Report- it states your credit balance, who has accounts with your name, what you have purchased; you get a free one every year


Credit Cards: What you need to know ?

A credit card is a plastic card issued by a bank, business, etc, for the purchase of goods or services on credit. You can use credit cards mostly in any business, store, or online. The benefit of having a credit card is that you can have a credit limit. A credit limit is an amount of money that you can only borrow. This helps you not pass your balance or have many credit cards. Some costs are over-the-limit fee if you go over your credit limit you get a penalty fee or its declined. There is an interest rate from 0%-29% if you have a lot of penalty fees it increases. There is also an annual fee and a late fee if you make the payment late.

Don't fall into the Credit Card Trap!

  • sign your credit card
    don’t share information
  • don’t max out your credit card only use on necessities
    keep track of what you’re charge
  • read the annual rate yearly cost for the money that you borrow
  • don't buy something you won't be able to pay in a month
  • Avoid having to much cards
  • ALWAYS PAY ON TIME!