What is Credit?
Credit is the ability of a customer to obtain goods or services before payment based on the trust that payment will be made in the future. Credit can be a very useful part of your financial aid toolkit if you develop good habit.
Credit Cards:
- Use someone else's money to make a purchase plus pay interest
- Heavily regulated
- Liability for credit card fraud $50
- Required investigations for double billing or incorrect charges (with written notification in a timely manner)
Debit Cards:
- Use your own money to make purchases
- Funds taken directly from your account
- Used in the same places as a credit card
- If bank is notified within two days $50, after two days $500
- After 60 days responsible for all charges
Your Credit Score:
- Your credit score is a calculation used to determine your creditworthiness, ability to repay debt, and is used by lenders to determine credit decisions
- For younger people, what you do now impacts your credit history down the road
- Those who have not been using credit long may not have favorable scores
Your credit history will affect you when you:
- Buy a house
- Purchase/lease a car
- Rent an apartment
- Apply for any type of loan
- Even when applying for a job!
Know what's in your credit history!
- Retrieve your once per year from all three agencies (Experian, TransUnion, Equifax)
- Find out how to get your credit score
Some Credit Safety Tips:聽
- Keep lenders informed about changes
- Keep copies of all documents in one place
- Open all mail聽
- Repay your loans on time to reduce or eliminate interest聽
- Build good credit with timely payments聽
- Always ask for help聽
Additional Resources:
聽- Free Credit Report and Score
-聽This is a government website that helps you,聽manage and use your money wisely,聽use credit and loans carefully,聽protect your personal information and聽protect your money from people who try to take it