What You Should Know About Good Credit And Bad Credit
Although the vast majority of adult Americans (and many minors, as well) have some kind of credit to their name or have accrued debt, remarkably few have a strong understanding of how this affects them in their daily lives.
Credit ratings are earned through the accrual of debt and how these debts are paid, be they paid on time, paid late, or if payments go into default. Typically, a person gathers debt in one of three ways: credit cards, automobiles, or homes. Most people build their credit rating (or ruin it) by using a credit card (or cards) that are easily attainable by someone without a credit history. When the individual pays their balance in a timely fashion, a positive rating begins to build. Conversely, when debts are left unpaid one’s rating plummets.
Most ratings range between 500 and 800 points, with 800 being excellent and 500 being poor. The better a person’s credit rating, the lower their interest rate will be. For example, a young person just beginning to build their credit history will tend to have high interest rates between 12 and 22% APR (Annual Percentage Rate — the...
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