Article: Understanding The Function Of Credit

Understanding The Function Of Credit

What is Credit?



Credit is the backbone and the engine behind the workings of the economy. Credit simply allows individuals and companies to borrow funds in good faith and pay it back over a specified time frame. Lenders base their decisions on who they should lend to by using your credit rating.



Your credit rating is a numerical score that is based on your payment history. From your credit cards and loans right down to your phone bill, you will find a recording of each payment. It reports whether you pay your bills on time or if you are constantly late. And if you are frequently late, it records the amount of time taken to make that particular payment. Your credit report is pulled (viewed) every time you apply for a loan, credit card and even to have a phone l...
 

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Understanding The Function Of Credit

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