What is credit?

If you do not have cash to buy certain goods and services (a car, for example), then the salesperson may be willing to sell the item to you in exchange for your promise (almost always made in writing) to pay the purchase price over time in installments. That is buying on credit. Your ability to buy on credit depends on …

How do I get a credit rating?

Credit ratings are developed by private companies called credit bureaus or credit reporting agencies and are made available upon request to most businesses where you ask for credit. These reports let them know whether you are a good credit risk. Although the records of- ten include confidential and personal information, by law they cannot include information regarding your marital status, …

What is collateral?

Collateral is real property (a house or land, for example) or personal property (an automobile or bank account, for example) pledged to ensure that a debt is repaid. For example, a car can serve as collateral to secure payment of the loan used to buy the car. Most people who buy cars do not have enough money to pay the …

What if the store does not offer a way to purchase on credit?

You may go to a bank and apply for a loan. Many people purchase cars by obtaining a loan from their bank rather than financing the car through the automobile dealership. Banks also will check your credit rating to determine if you are a good credit risk. When purchasing anything on credit it is best to shop around to see …

What if I need to borrow some money?

Banks and credit unions are preferred lenders when borrowing money for the best interest rates. Be aware of the interest rate on a loan prior to signing a contract. Some places may charge up to 300 Percent. In particular, you should try to avoid “Pay-Day Loans” and “Car Title Loans” for short term needs. Alternatives may include among other things …

What can I do if I owe more money than I can pay?

If you cannot make your payments as they come due, you should contact your creditor as soon as possible, explain your situation, and seek to work out a new payment schedule or extension. Never ignore your creditors. Always be courteous and explain your situation. If your creditor will neither give you an extension of time nor reduce your payments, you …

What are some of the consequences of bankruptcy?

If you file for bankruptcy, you may be forced to turn over your non-exempt assets (real property and personal property) to the Bankruptcy Court, and these assets will be used to help pay your creditors. Non-exempt assets are those assets that are not protected by state or federal laws (exemptions) that keep the assets from being turned over to your …