Credit Basics

A commonly asked question. Do you need a credit card to build credit? Yes, or no?

Most people think credit is confusing, but it's really not. Your credit score is just a three-digit number that tells lenders how you manage borrowed money. Let’s start with the basics. What a credit score actually is! Credit is trust, your ability to borrow money now and pay back later. That's it! When a lender, a bank, or a company gives you credit, they are basically saying that they trust that you would pay them back.

One may ask what makes up that trust? (My top 3 listed below)

1.    Paying bills on time.

2.    Watching your credit limit.

3.    Planning before applying for credit.

So, what's a credit score?

It's a number between 300 and 850. Why does credit matter? (My top 3 listed below)

1.    Better interest rates.

2.    You get easy approval.

3.    Your insurance costs would be lower.

Good credit saves you money! Bad credit costs you money!

Oh yeah, let's not forget the answer to the question. Do you need credit? A credit card to build credit? Yes, yes, and yes!

Ways to review your credit score free. You want to monitor your credit score on Credit Karma. This is the Vantage score. So, it will not be your real score. But it's perfect for getting a range of what your score possibly is. FICO is your real score. You will have to go to My FICO or AnnualCreditReport.com to be able to get your FICO score. When you go to these cites, there is a cost associated with that. AnnualCreditReport.com is the best site to get a detailed history of your credit profile.

Are you checking your credit today?

Let's stay rooted and keep growing.

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