IMOR Financial - The Importance Of Credit in Finances

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The Importance Of Credit in Finances

Credit is a part of your financial control. It helps you to purchase the things you need now, like a car loan or credit card. It is based on the promise of you paying later. If your credit needs improving by working out and planning that will help ensure you’ll qualify for loans or credit cards when you may need them.

What is credit? 

There are many types but the most common types are installment loans and revolving credit. Installment loans are a set amount of money loaned to you to use for a specific purpose. The most common are student loans and auto loans. Revolving credit is a line of credit you can keep using after paying it off. You can use it to make a purchase as long as the balance stays under the credit limit, and this can change over time. Credit cards are the most common types of revolving credit.

When it comes to credit cards, they are not all the same. 

Explore all the pros and cons of credit cards when choosing the one to fit your needs. Interest is the cost of borrowing money. The lender charges a specified percentage of the average daily balance on the account, which is called the interest rate. The interest rate is applied to your outstanding balance on a monthly basis. Some credit cards have different terms, like purchases and cash advances. Make sure you read the fine print. There are fees on credit cards as well, but not all cards charge the same fees. Understand what fees you are responsible for. 

The credit limit is the maximum balance you can carry on a credit card. It’s determined by the lender based on income and credit history. Understand your credit report and credit scores. Your individual credit report is what the national consumer reporting agencies use to calculate your credit worth. Many aspects of your life affect credit ratings. They include: a lender approving a new loan determining student loan  eligibility, being reviewed by insurance companies when you apply for life insurance and homeowners insurance, landlords, when deciding whether they will rent to you, and the influence your interest rates and fees have on a loan. 

Credit tips: 

Always pay bills on time, keep a low balance on credit cards, monitor your credit report for mistakes, protect your finances by keeping financial records in order and always keep any eye out for suspicious activity.

Having a strong and healthy credit is crucial for the duration of your life. You’ll have financial advantages including access to more options like lower rates and more lender choices.

It’s important to build credit early and consistently. Contact IMOR today at This email address is being protected from spambots. You need JavaScript enabled to view it. to learn more.


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