"Credit" is the ability to borrow money to purchase items under the agreement that you'll pay the money back at a later date. The conditions of the loan include repayment timeframes, interest payments, and fees if applicable. "Credit can also refer to a person's history of borrowing and repaying money.
Credit and Credit Scores
image source: Nerdwallet.com
You’re credit score helps lenders to assess whether or not you’re a good candidate for lending. For instance; you want to buy a car, but can’t pay the total amount all at once, this is where a credit score comes in! The financial website Nerdwallet has a good article on credit scores; click here to read the article.
Finding out your credit score:
You are allowed free access to your credit score for free once every 12 months from each of the three main credit reporting agencies (you can access it more often, but you’ll have to pay for that service). If, while looking at your credit report, you find some sort of discrepancy, or difference between what you see and what the company sees, you can dispute the error with the reporting agency. For more on disputing credit errors, visit the Federal Trade Commission's website here.
Here are links to the three credit reporting agencies:
Credit cards are made of plastic (sometimes metal), are rectangular, and fit in your wallet. Credit cards are issued by financial institutions, and these institutions manage things like: applications, approvals, issuing the cards themselves, and deciding terms and fees. To qualify for a credit card, the applicant generally must have a good credit history (see above on credit scores), be at least 21, and have a certain income amount, as well as income-to-debt ratio (how much you make, in regards to how much debt you have).
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