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Credit

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:37
  • 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
credit-score-chart-1Your 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 FREE credit report once per year from all three agencies (Experian, TransUnion, Equifax)
  • Find out how to get your credit score here.
Some Credit Safety Tips: 
  1. Keep lenders informed about changes
  2. Keep copies of all documents in one place
  3. Open all mail 
  4. Repay your loans on time to reduce or eliminate interest 
  5. Build good credit with timely payments 
  6. Always ask for help 
Additional Resources:
Credit Karma - Free Credit Report and Score
Consumer Protection - This is a government website that helps you, manage and use your money wisely, use credit and loans carefully, protect your personal information and protect your money from people who try to take it