What is Credit? Credit is borrowed money that you can use to purchase goods and services when you need them. You and the credit grantor are in agreement.

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Presentation transcript:

What is Credit? Credit is borrowed money that you can use to purchase goods and services when you need them. You and the credit grantor are in agreement that you will pay back the amount you spent, plus applicable finance charges, at an agreed- upon time.

Types of Credit Revolving Credit Ex: Visa, MasterCard, Discover, or Store Credit Cards- Macys, Dillards, Express, etc… Charge Cards Ex: American Express

Types of Credit Service Credit Ex: Electricity, Cell Phone, Cable, etc… Not all are reported to Credit Agencies Installment Credit Ex: Car Loans and Mortgages

Credit Report A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness Personal Data, Summary of Credit History, Detailed Account Info, Inquiries, Info on How to Dispute

Credit Bureaus Experian TransUnion Equifax Each bureau assigns your Credit Rating and Score based on your Credit History

Credit Scores A credit score is a number calculated using information from your credit history Lenders use that number to help them decide how likely it is that they will be repaid on time if they give you a loan or a credit card. FICO Score- Fair Isaac Credit Organization

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