Why Credit Is Important In School

This essay is going to be about a topic that is not touched on much in school, but it will one of the most important lessons of your life. I am talking about credit of course. This essay will include, but not limited to, what makes good and bad credit, what a FICO score is, how to establish credit, how to establish and acquire credit, what the requirements are, and a comparison and opinion of ten different credit cards. First off, what is credit? Credit is a way to see whether or not a person is reliable in their payments. This includes, but is not limited to, car payments, loans, and house payments. Credit is almost always used in these situations. If you have better credit you get better deals, but if you have bad credit, you will

Credit is controlled by something called a credit card. Depending on the card you use, you will be using money from different places. A Wells Fargo credit card will take money directly from Wells Fargo. There is a catch though. In order for the companies to not go bankrupt, they give you a specific price range, and they charge interest on the card. What this means is that you will pay more than your price range if you spend the entire price range. That is how they make profit off these tiny little cards.

If you are smart with your money, you can pay these on time. If you aren’t, you will not be able to. These both affect your credit score. Before we get into that, let's talk about establishing credit. In order to establish credit, you need a credit card. Once you get a credit card, apply for a loan. Paying that loan on time will set your credit score on the good side, if not...that’s bad for you and your credit

Maybe you wondered, “How is credit measured?” Credit is measured by a thing called a FICO score (let’s call it credit score to keep things simple). A credit score is based on how reliable you are with your payments. Your credit score is the thing that these car, house, etc. dealers work with in order to think, “Hey, this guy’s pretty good on his payments.”, or, “Hey, this guy is not getting this.” As you can see, this is very important.

“What is a good credit score, and how do I raise and maintain it?”, you may be asking. An average credit score is about 680. This means that you have paid most of the loans on time. In order to raise your credit score, you need to pay your loans ahead a time by paying a little extra each time. Once you get a good credit score, you need to maintain it. In order to do this, you need to continue to pay your loans and bills on time. An example of what you do not want to do is putting off your bills until they are overdue. That will destroy your credit.

Now that we now a little about credit and credit score, let's talk about the kinds of credit cards. I will only be comparing ten types of credit cards, so these are not the only ones available. These are all based on a two-thousand dollar budget. I am assuming that the buyer is twenty-five years of age with a credit score of