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What is Credit?
The word credit comes from Latin, meaning trust.
Credit is an arrangement for deferred payment of a loan or purchase.
In this arrangement the merchant 'trusts' you that you
pay when the payment is due. Basically, credit allows you to buy now and pay later.
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What is a Credit Card?
A credit card is a plastic card with a unique number and a coded magnetic stripe.
This card entitles you to a line of credit. The amount of credit and the
interest rate are determined by your income and credit history as
reported by your credit report.
A credit card is a great financial tool. It is easy to use and more convenient
than carrying cash. With the recent increase of shopping over the Internet it is
has become a necessity that you have your own credit card. Credit cards also offer valuable
consumer protections under federal law.
At the same time, carrying a credit card is a big responsibility. If you don’t use it carefully,
you may owe more than you can repay, damage your credit rating, and create
credit problems for yourself that can be difficult to repair.
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Qualifying for a Credit Card
If you have a regular source of income you’re well on
your way to qualifying for a card. But despite the invitations from card
issuers, you still will have to demonstrate that you’re a good risk before they
grant you credit. The proof is in your credit report.
If you’ve financed a car
loan or other purchase, you probably have a record at a credit reporting bureau.
This credit history shows how responsible you’ve been in paying your bills and
helps the credit card issuer decide how much credit to extend.
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Review your Credit Report
Before you submit a credit application, get a copy of your credit report to
make sure it’s accurate. Credit reports are maintained by three major national
credit bureaus listed below:
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EQUIFAX
PO Box 740241
Atlanta, GA 30374
(800) 685-1111 |
EXPERIAN
PO Box 2002
Allen, TX 75002
(888) 397-3742 |
TRANS UNION
PO Box 390
Springfield, PA 19064
(800) 916-8800 |
Instead of calling each major credit reporting agency, it is far more
convenient to receive a 3-in-1 credit profile
with credit checks from all 3 national agencies
and a credit score. This will give you the exact same information that the
credit card issuer uses to decide on your credit worthiness. To see how
easy you can obtain your 3-in-1 report click on the link to the right.
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