Credit & Borrowing

Credit & Borrowing

Credit and Borrowing

If you’re going to get ahead financially, controlling your use of credit is a must-do. While credit can be convenient — you can buy things when you want them even if you don’t have the cash on hand—it can also become your worst dilemma. The more you borrow, the more you’ll owe, and as your interest payments mount up, you may find it hard to dig yourself out. Equally troubling, you won’t be able to save for your future.

To use credit wisely, you’ll need to build a solid credit history, check your credit reports annually, and pay attention to your FICO score, which lenders use to determine the kind of risk you pose, and the annual percentage rate, or APR, they will charge.

The risk you run with credit cards is that you charge too much, pay off too little, and end up paying additional fees, which increases your debt still further. If you borrow money to pay for a home or car, you risk losing your collateral if you can’t keep up with your payments. Credit by itself isn’t good or bad: it’s how you use it that makes a world of difference.

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Credit and Borrowing

Credit & Borrowing

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