Most
military personnel have heard the term “credit”, but many do not
understand the concept of credit-how it works and how it impacts
them on a personal level.
If you are over eighteen years old and ever
held a job, you have probably put your credit to work for you.
Perhaps you have obtained a car/department store card, tried to rent
an apartment or gotten a cell phone.
Good credit is a habit of paying your bills before the overdue
date. It makes it possible for you to obtain money, loans, goods
and services with the understanding that you will pay it back at a
later date. The only way to achieving and maintain good credit is
paying your bills on time every time. Having no credit history or
not having good credit will cause lenders to charge you higher
interest or be denied credit all together.
Having bad credit is a negative term, meaning that you are a
credit risk; reputable lenders will not lend you money because you
have shown a pattern of not paying back your debts.
Shockingly, potential employees, the military included, run
credit checks and consider applicants credit histories before hiring
them. Companies figure that people with decent financial
responsibility are less likely to steal and that managing your
personal finances translates into responsibility on the job and
being a better employee. Car/life and rental insurance agencies
also look at your credit report and credit score before extending
you insurance. Having bad credit and a low credit score will
increase your vehicle and life insurance rates significantly.
Credit bureaus maintain and sell information about consumers
credit histories.
They collect information about your payment habits from savings
banks, credit unions, finance companies and retail stores. The
information is sold as credit reports to creditors and lenders.
When you apply for a credit card or loan, all lenders order your
credit report from at least one of the three credit bureaus and
analyze the information to decide whether or not to grant you
credit. They make money by charging a fee for every credit report
sold, all late and missed payments made by you are reported to one
or all of the three credit reporting companies. Although
credit-reporting agencies provide your credit report to lenders,
they do not make the actual lending decisions. The lenders evaluate
your credit report and any other factors they consider important
when deciding whether or not to offer you credit.
Most
military personnel have heard the term “credit”, but many do not
understand the concept of credit-how it works and how it impacts
them on a personal level. 