Credit 101

Credit 101 basic: Credit lets us make a promise to pay in the future for something we really want, but can’t quite afford to pay for now.

Without doubt, credit plays a major role in our everyday lives. It helps us go to school and buy that first car — and maybe even that first really good interview suit.  And it can make it possible to finally have a house of our own.

The lender’s main job is to decide if you are “credit worthy” — someone they can trust with the obligation to pay them back. Your job is to pay them back. But you also need to manage your credit in a way that doesn’t leave you drowning in debt. Or hounded by folks trying to get the money you can’t pay.

The reason I call this section Credit 101 is that the more you understand how credit works — and how you can make it work for you — the healthier you and your personal financial picture can be. And I use “healthier” on purpose, since money (or the lack of it) can be a huge stress factor.

Credit 101 basics

♦    What Do All Those Credit Terms Mean?

♦    How Your Credit Score Affects Price of Things You Buy

Handling your loans and credit

♦    Kicking Debt To the Curb: A Real-Life Success Story

♦    Loaning Money To a Friend (Sample Loan Contract)

♦    Is It Smart To Use Savings to Pay Off Loans?

Mortgages and other types of housing loans

♦    Do Low Mortgage Rates Mean You Should Buy a Home NOW?

The value of money

♦    Present Value: Understanding Value of Money Today

We’re still growing. Feel free to ask for topics you want us to talk about.