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.
- 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)
- 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 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
- Buy a house
- Purchase/lease a car
- Rent an apartment
- Apply for any type of loan
- Even when applying for a job!
- Retrieve your FREE credit report once per year from all three agencies (Experian, TransUnion, Equifax)
- Find out how to get your credit score here.
- Keep lenders informed about changes
- Keep copies of all documents in one place
- Open all mail
- Repay your loans on time to reduce or eliminate interest
- Build good credit with timely payments
- Always ask for help