Summary of Credit
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Summary of Credit
Credit is a financial transaction wherein one party lends money to another with the expectation that the debtor will repay the full amount of money borrowed to the creditor in a certain amount of time, with additional money for interest or finance charges. Credit is important to the smooth operation of the economy. But credit abuse is harmful, and it will make it harder for you to achieve your financial goals in life.
Although creditors take steps to determine the creditworthiness of a debtor, the process is not perfect. Consumers should view their credit reports to be sure that information on file is complete and accurate. If inaccuracies are found, they should be reported to the credit bureau, which has 30 days to correct the mistake.
Practical Ideas I Can Start with Today
- Obtain my credit report from all three credit bureaus once per year.
- Dispute any mistakes in my credit report, and add any missing positive information.
- If I don’t have a credit card, apply for one, even if only from a gas company or retailer.
- Use my credit card every month. Make small purchases and pay them off to show I can handle credit responsibly.
What you have learned
- What Is Credit?
- Get Your Credit Report Periodically
- How Lenders Rate Creditworthiness: The Three Cs
- How Lenders Rate Creditworthiness: Your FICO Score
- Fair Credit Practices
- Credit Regulations Designed to Protect Consumers
- Responsible Use of Credit