{"id":172,"date":"2023-02-02T23:23:27","date_gmt":"2023-02-02T15:23:27","guid":{"rendered":"https:\/\/jonfire.com\/?p=172"},"modified":"2023-02-13T15:40:33","modified_gmt":"2023-02-13T07:40:33","slug":"an-introduction-to-credit","status":"publish","type":"post","link":"http:\/\/jf.local\/an-introduction-to-credit\/","title":{"rendered":"Lesson 101: An Introduction To Credit And How You Can Read Your Credit Report &#038; Scores For Free"},"content":{"rendered":"<p>Credit is a part of most people\u2019s lives. We use credit cards in our everyday lives, and sometimes we need to get a loan to buy something big, like a car or a house. But if you don\u2019t understand how credit works, it can be confusing and even scary.<\/p>\n<p>Don\u2019t worry! In this article, we\u2019ll teach you everything you need to know about how credit works so that you can make smart financial decisions for yourself and your family throughout your life.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#What_is_credit\" title=\"What is credit?\">What is credit?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#How_do_I_get_a_credit_card\" title=\"How do I get a credit card?\">How do I get a credit card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#Getting_approved_for_a_credit_card\" title=\"Getting approved for a credit card\">Getting approved for a credit card<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#What_should_I_look_for_in_a_credit_card\" title=\"What should I look for in a credit card?\">What should I look for in a credit card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#Why_do_most_people_need_a_credit_card\" title=\"Why do most people need a credit card?\">Why do most people need a credit card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#The_best_way_to_build_up_your_credit_history\" title=\"The best way to build up your credit history\">The best way to build up your credit history<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#How_does_your_credit_score_work\" title=\"How does your credit score work?\">How does your credit score work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#Credit_reports_and_scores_whats_the_difference\" title=\"Credit reports and scores, what&#8217;s the difference?\">Credit reports and scores, what&#8217;s the difference?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#Where_can_I_find_my_credit_score\" title=\"Where can I find my credit score?\">Where can I find my credit score?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#Knowing_how_to_manage_your_money_especially_when_it_comes_to_credit_cards_is_an_important_skill\" title=\"Knowing how to manage your money, especially when it comes to credit cards, is an important skill.\">Knowing how to manage your money, especially when it comes to credit cards, is an important skill.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"http:\/\/jf.local\/an-introduction-to-credit\/#Final_Words\" title=\"Final Words\">Final Words<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_credit\"><\/span>What is credit?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A credit card is a way to make purchases without cash. It\u2019s like a loan that you pay back over time, with interest.<\/p>\n<p>Credit is the ability to borrow money, and it can be a good thing or it can be bad depending on how you use it. If you use credit wisely and pay off your bills in full each month, then having good credit will help your life immensely by allowing access to financial products such as loans at lower interest rates or better terms than if they were available without having established good credit scores (more on this later).<\/p>\n<p>But if used poorly like making purchases with no intention of paying them back\u2014then having poor or bad credit could lead to some serious consequences: high fees and interest rates; damaged relationships with lenders; even jail time!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_do_I_get_a_credit_card\"><\/span>How do I get a credit card?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You\u2019ve probably heard that credit cards are easy to get and free. They\u2019re not. Credit cards are also not just for adults, emergencies, or shopping.<\/p>\n<p>Be 18 years old and have a job in order to get your own credit card (except those rare people who already have one before they turn 18). You can\u2019t just go out and apply for one on your own; you need someone over 21 who has excellent credit history themselves to co-sign with you if you want them in charge of paying off any debts that come up while using the card in case something goes wrong with it later down the line.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Getting_approved_for_a_credit_card\"><\/span>Getting approved for a credit card<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-large wp-image-236\" src=\"http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/mark-oflynn-bqjswIxbhEE-unsplash-1024x683.jpg\" alt=\"\" width=\"960\" height=\"640\" title=\"\" srcset=\"http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/mark-oflynn-bqjswIxbhEE-unsplash-1024x683.jpg 1024w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/mark-oflynn-bqjswIxbhEE-unsplash-300x200.jpg 300w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/mark-oflynn-bqjswIxbhEE-unsplash-768x512.jpg 768w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/mark-oflynn-bqjswIxbhEE-unsplash-1536x1024.jpg 1536w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/mark-oflynn-bqjswIxbhEE-unsplash.jpg 1920w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><\/p>\n<p>You\u2019ve probably heard that getting approved for a credit card is like applying for a job. It\u2019s not as simple as that, but there are some similarities. Credit card companies want to make sure you can pay your bills and don\u2019t have too much debt (which might lead to bankruptcy). They also want to make sure you aren\u2019t a fraud risk (because if someone steals your identity, it hurts everyone).<\/p>\n<p>When applying for any type of loan or credit line\u2014whether it\u2019s from a bank or an online lender\u2014the lender will look at several factors when deciding whether they should give you money.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_should_I_look_for_in_a_credit_card\"><\/span><span style=\"color: #000000; font-size: 22px;\">What should I look for in a credit card?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When you\u2019re looking for a credit card, there are a few things to keep in mind. Foremost, what type of card do you want? Are you looking for something with rewards? Or maybe one with no annual fee?<\/p>\n<p>If the latter is true, then we have good news: it\u2019s possible to find both types of cards that don\u2019t charge an annual fee! If rewards are important to your purchasing habits and spending patterns (and they should be), then it might make sense for you to get two or three different cards so that each one fulfills its own purpose.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_do_most_people_need_a_credit_card\"><\/span>Why do most people need a credit card?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Credit cards are a convenient way to pay for things, whether you\u2019re buying an item online or in-store. They can also build up your credit history, which can be helpful if you want to borrow money in the future (like for a mortgage).<\/p>\n<p>Credit scores are based on three factors: 1) payment history; 2) amounts owed; 3) length of time with accounts open. The longer you\u2019ve had an account open without missing payments or maxing out the limit on it, the better your score will look. A high score means lower interest rates when it comes time for loans or mortgages\u2014which is why some banks offer rewards programs that encourage customers like yourself to use their cards!<\/p>\n<p>As long as you use them responsibly and make sure not to go over their limits by paying down balances each month before they become due again (or at least before they incur interest), then I think there\u2019s nothing wrong with having both types of accounts available simultaneously in case one type isn\u2019t accepted somewhere else where we need more flexibility than just cash would provide us with.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_best_way_to_build_up_your_credit_history\"><\/span>The best way to build up your credit history<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-large wp-image-237\" src=\"http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/scott-graham-5fNmWej4tAA-unsplash-1024x683.jpg\" alt=\"\" width=\"960\" height=\"640\" title=\"\" srcset=\"http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/scott-graham-5fNmWej4tAA-unsplash-1024x683.jpg 1024w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/scott-graham-5fNmWej4tAA-unsplash-300x200.jpg 300w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/scott-graham-5fNmWej4tAA-unsplash-768x512.jpg 768w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/scott-graham-5fNmWej4tAA-unsplash-1536x1025.jpg 1536w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/scott-graham-5fNmWej4tAA-unsplash.jpg 1920w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><\/p>\n<p>If you\u2019re looking for the best way to build up your credit history, the answer is simple: get a credit card. That\u2019s right! It\u2019s not as scary as it sounds, and there are a few ways that you can use them responsibly without getting into trouble or going broke.<\/p>\n<p>First things first: don\u2019t rush into anything. Before signing up for any type of loan or line of credit (including store-branded cards), make sure that you understand all the terms involved in taking out that loan or line of credit\u2014and make sure those terms make sense for your budget! Once you\u2019ve done this research and determined which option makes sense for your needs, applying should be pretty straightforward.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_does_your_credit_score_work\"><\/span>How does your credit score work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Your credit score is a number between 300 and 850. It\u2019s calculated based on the information in your credit report, which is basically a record of all of your past borrowing and repayment history.<\/p>\n<p>The higher your score, the better it is for lenders to lend money to you because they\u2019ll assume that you\u2019re less likely to default on payments (i.e., not pay back what you borrow). They\u2019ll also assume that they can charge higher interest rates on loans given out with high-scoring borrowers than low-scoring ones\u2014a win-win situation!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Credit_reports_and_scores_whats_the_difference\"><\/span>Credit reports and scores, what&#8217;s the difference?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Credit reports and scores are not the same thing, but they&#8217;re related. A credit report is a record of your financial history that&#8217;s kept by one of three major credit bureaus: Experian, TransUnion, or <a href=\"https:\/\/www.equifax.com\/personal\/education\/credit\/report\/difference-between-credit-score-vs-credit-report\/\" target=\"_blank\" rel=\"noopener\">Equifax<\/a>. Each bureau has its own database with information about you and your borrowing habits; this database is referred to as your &#8220;consumer file.&#8221;<\/p>\n<p>Credit scores are numerical representations of how risky it would be for lenders to lend money to someone based on their history with debt repayment (or lack thereof). They\u2019re calculated using information in your consumer files at each bureau\u2014and sometimes other sources too\u2014and then assigned a number between 300-850 based on how risky they think you might be.<\/p>\n<p>All three bureaus offer free access to one copy of your report once every 12 months through <a href=\"https:\/\/www.annualcreditreport.com\/\" target=\"_blank\" rel=\"noopener\">AnnualCreditReport.com<\/a>; however there are also paid options available if you want more frequent updates or access beyond what&#8217;s available through this site.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Where_can_I_find_my_credit_score\"><\/span>Where can I find my credit score?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-238\" src=\"http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/no-credit-score-debt-deny-concept.jpg\" alt=\"\" width=\"1000\" height=\"730\" title=\"\" srcset=\"http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/no-credit-score-debt-deny-concept.jpg 1000w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/no-credit-score-debt-deny-concept-300x219.jpg 300w, http:\/\/jf.local\/wp-content\/uploads\/2023\/02\/no-credit-score-debt-deny-concept-768x561.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/p>\n<p>Your credit score is a number between 300 and 850 that represents your overall financial health. It\u2019s calculated by looking at how you\u2019ve managed your money in the past, including whether you make payments on time and how much debt you have.<\/p>\n<p>Credit reports have three major components: identifying information like your name and address; public records such as court judgments or liens against real estate; and financial records such as bank accounts opened in the last year (and whether those accounts were paid off).<\/p>\n<p>The most important part of a report for lenders is what we call \u201ccredit activity,\u201d which includes everything else about how well (or poorly) someone has managed their finances. This includes things like late payments or defaults on loans or credit cards &#8211; but also positive actions like paying off debts early or managing multiple lines of credit responsibly.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Knowing_how_to_manage_your_money_especially_when_it_comes_to_credit_cards_is_an_important_skill\"><\/span>Knowing how to manage your money, especially when it comes to credit cards, is an important skill.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As you can see, credit cards are a useful way to build your credit history. If you don\u2019t have one, or if your history is sparse, then getting one will be good for you.<\/p>\n<p>But it\u2019s also important to know how to use them wisely. Credit cards can be dangerous if used irresponsibly; they can lead people into debt and make them poor financial health in the long run. But when used properly -and as part of an overall strategy for managing money\u2014they can help you build a solid financial future.<\/p>\n<p>After all, you want to break the <a href=\"http:\/\/jf.local\/breaking-the-paycheck-to-paycheck-cycle-tips-for-young-adults\/\">paycheck-to-paycheck cycle<\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Final_Words\"><\/span>Final Words<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With all this information in mind, you should have a better understanding of what credit is and how it works. Whether you&#8217;re looking to improve your credit score or get approved for a credit card, there are many ways to do so. You just need to know where and how much information about yourself will be shared with lenders who can help make those decisions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Credit is a part of most people\u2019s lives. We use credit cards in our everyday lives, and sometimes we need to get a loan to buy something big, like a car or a house. But if you don\u2019t understand how credit works, it can be confusing and even scary. Don\u2019t worry! In this article, we\u2019ll teach you everything you need to know about how credit works so that you can make smart financial decisions for yourself and your family throughout [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":173,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[15],"tags":[10,11],"_links":{"self":[{"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/posts\/172"}],"collection":[{"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/comments?post=172"}],"version-history":[{"count":6,"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/posts\/172\/revisions"}],"predecessor-version":[{"id":242,"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/posts\/172\/revisions\/242"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/media\/173"}],"wp:attachment":[{"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/media?parent=172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/categories?post=172"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/jf.local\/wp-json\/wp\/v2\/tags?post=172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}