Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Credit Basics and other Credit Report topics.
You've probably heard the phrase, “Give her the credit she's due,” or “You deserve credit for a job well done.” Well, the notion of credit for a job well done extends beyond your personal, academic, or professional achievements and into your financial life. In the financial sense, credit is an agreement between a lender—a bank, credit union, credit card issuer, utility company, or other institution that has a financial stake—and a borrower. The lender agrees to grant the borrower purchase power, usually in the form of cash or a line of credit. The borrower agrees to repay any sums borrowed plus interest. Lenders will perform a credit check to determine if the borrower is creditworthy. There are degrees of creditworthiness. If the borrower has a positive credit profile, the terms of the credit will be more favorable than for those who have negative information in their credit profile.
|Jennifer Mathes, Ph.D.|