Quick questions about credit

Sara Weiser – PSECU

Everyone talks about credit, but what is “credit” actually? Credit is your ability to borrow money or receive goods based on the belief that you will repay the debt in the future.

  • “Who is really going to check my credit?” 

There are many instances and people who will check your credit. Future lenders for cars, mortgages, personal loans and credit cards will check your credit to decide if they can trust you to pay back your debt. Future landlords may check your credit to see if you will pay your rent each month. Even future employers often check credit to make sure you are a trustworthy individual.

  • “What happens if I have bad credit?”

Having bad credit may mean getting denied for auto loans, mortgages, personal loans, credit cards, apartments to rent or even a job. Some places may still offer you loans, but you often will pay a much higher interest rate if you have bad credit.

  • “I do not want bad credit, but I do not have enough money to pay my bills or student loans. What should I do?” 

Call your lenders and see if additional payment options or deferment plans are available. Many lenders are willing to work with you if you call before late payment becomes a problem.

The content provided in this article is for informational purposes only. Nothing stated is to be construed as financial or legal advice. PSECU recommends that you seek the advice of a qualified financial, tax, legal or other professional, if you have questions.

 

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