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Credit

When used correctly, credit can be a great tool in financial planning when it comes to reaching financial goals.  When used incorrectly, poor credit can be devastating to your finances and your financial well-being.  Credit is a contractual agreement whereby a borrower receives something of value in agreement to pay the lender at a future date.  Once credit has been accepted it becomes debt.  People acquire credit by making promises to pay in the future for something they receive in the present.  

 
Strings Attached?  You bet!  It’s going to cost you something in return…ALL of what you borrow and usually some interest (a certain percentage of the total amount borrowed).
With maintaining a good credit score, the objective is simple…to show prospective creditors, employers, or anybody else who might look at your credit that you are responsible when it comes to your spending.  
 
Ways to start building credit include…
 
  1. Have a utility bill put in your name.  This can include a phone bill, an electric bill, or even your cable bill.
  2. Apply for a gasoline card.  They are fairly easy to get and it is fairly easy to plan for how much you will need to pay each month.
  3. Open a savings and checking account so that you can demonstrate a history of deposits, withdrawals, and transfers.
 
Contact the Student Success Center to make an appointment with somebody who can walk you through establishing and maintaining good credit as well as give you tips for monitoring your credit on your own.  
 
How are credit cards different from debit cards?  Read about the basics, including how to avoid card fraud, recognizing counterfeit cards, and new technology.   You can also read about debit and credit card blocking, which occurs when companies place a “hold” on your account in certain situations. 
 

Additional Resources

Want to test your credit knowledge?  Download the student credit activity worksheet  from Practical Money Skills for Life.
 
Trying to decide which credit card to get?  Download this credit card worksheet  to help you decide on the best card for you. 
 
Shop for and compare the costs and features of credit cards using the worksheet from Practical Money 
 

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