Credit Case

Credit

Credit is when you receive funds either directly or indirectly to buy goods and services with the promise to pay for them in the future. Many people use credit now days and it hurts a lot of people also. People feel like they are required to have certain items immediately. They use it to purchase things in which they don't have the money for at the time and pay a little chunk off at the end of the month until it's paid off. What they have left to pay to the lender is debt and in generally all cases your debt has interest that builds up.

There are two different types of credit, using credit cards and borrowing money directly. When a person has a credit card it allows them to make a purchase without using cash. Credit cards can be used at nearly all stores, restaurants, hotels, etc. They can be used anywhere in the U.S. and even in some foreign countries. When you use a credit card your basically getting a loan without having to apply for it and wait on acceptance. Borrowing money is the same thing as getting a loan and you can get a loan at any of the six different financial institutions

When a person wants to build their credit or even start it. They have to gain creditworthiness and to do this they must first apply for credit by filling out a credit application. Then the lending agency will do a credit check on you and do and investigation of a person's income, current debts, personal life, and past history of borrowing and repaying debts. Three major factors are considered when applying for credit: your ability to hold a steady job, your character, and any collateral you possess. If you haven't kept a job or have had many jobs in a short amount of time or have many debts your lenders will be even more reluctant and give you a better interest rate. When they look at your character they look at your education and if you've had problems with the law and other factors that indicate a persons personality. The last thing they look at is collateral and that is the size of your capital or your personal wealth. That indicates you're past ability to save and accumulate and your present ability to pay off the loan.

There are many responsibilities when borrowing money on credit you have to make all your payments on time. If you don't pay off the loans and your debt piles up the lenders might hirer a collection agency to get the money from you that you owe the lender. If you don't pay it off after awhile the lender has to write it off and take your loan as a loss and thus you get a bad credit history. More responsibilities to remember as a borrower are to pay the higher interest credit cards first and pay more then the minimum payment. The most important is to pay the lowest loan first!

There were six acts that the government created and passed in the passed fifty years ago. They include, The Truth in Lending Act, Fair Credit Report, Equal Credit