Basic knowledge on Credit
What is a credit score?
A credit score is a three-digit number that tells lenders if you're a good risk, based on your financial history. A higher score means you're more likely to get loans, better interest rates, and approved for an apartment. It's calculated using your payment history and how much debt you have
How Can I Improve My Credit Score?
How Long Does Negative Information Stay on My Credit Report?
Most negative information, such as late payments, collections, and foreclosures, can stay on your credit report for up to seven years. A bankruptcy can remain for up to 10 years.
Kate just got a text from a random number, claiming to be her bank asking for her credit card info. What should she do?
Kate should ignore the text, as it is likely a scam. She should immediately contact her bank directly by calling the number on the back of her credit card to verify the security of her account. She should also report the scam text.
you can tune a violin, but u can't tuna
fish
What is credit?
Credit is the ability to borrow money or goods and services with the promise to pay for them later. It is based on a lender's trust in the borrower's ability to repay the debt, often with interest or fees.
What is the single most important factor in my credit score?
Your payment history (paying bills on time) has the biggest impact.
What Should I Do If I Find an Error on My Credit Report?
Dispute the error with the credit reporting company and the information provider (e.g., the bank or credit card issuer). The Consumer Financial Protection Bureau (CFPB) provides guidance on this process.
Using a credit card for online purchases/travel
Offers stronger fraud protection compared to debit cards, which can prevent direct access to your bank account in case of a breach.
Why is it Important to maintain a high credit score?
it offers significant financial advantages, including better access to loans, lower interest rates, and improved terms on financial products. Lenders use credit scores to assess your creditworthiness and the risk involved in lending you money. A high score signals that you are a reliable borrower, leading to more favorable offers.
How can I build credit if I have none?
Consider a secured credit card, where you provide a cash deposit that acts as collateral and usually sets your credit limit. Another option is becoming an authorized user on a trusted person's account or getting a co-signer on a loan.
Do hard inquiries hurt my score?
A hard inquiry occurs when you apply for new credit (ex: a loan or credit card). It can have a minor, temporary negative impact and typically stays on your report for up to two years. Soft inquiries (like checking your own report) do not affect your score.
Filing for bankruptcy
Has a major negative impact, remaining on the credit report for up to seven years.
how are you feeling
Good 😃
How do you obtain a credit score?
You can obtain a credit score for free by checking your credit card or loan statements
(open a credit card in your name)
Is openining more than two credit cards smart?
No, new accounts and multiple credit applications can lower your score and cause lenders to see you as a higher risk.
How can I improve a low credit score?
Opening a new credit account
Results in a temporary small dip due to a hard inquiry and a shorter average account age.
What is revolving credit?
Type of credit that allows you to borrow money up to a set limit, repay it, and then borrow again as needed, without needing a new loan each time. You are charged interest only on the amount you borrow, not the full limit, and your available credit is replenished as you make payments.
Should you pay your credit card bill in full?
What are the negetive affects for using credit, rather than debit?
The negative effects of using credit include accumulating debt through high-interest rates and fees, damaging your credit score by missing payments, and the temptation to overspend.
Paying off credit card debt
Significantly improves scores by lowering credit utilization (amounts owed).
Are you ready to graduate?
YES