Credit & Collections

Credit and Collections

What is Credit?

Credit is an agreement you make with a lender that allows you to pay for goods or services now. In return you agree to pay the lender back, usually with interest, in the future.  Credit comes in many different forms such as personal loans, lines of credit, mortgages, credit cards, payday loans and leases.

Being a responsible borrower can help you to build a good credit history, making you more attractive to lenders and giving you the ability to negotiate lower interest rates.  Using credit irresponsibly and spending beyond your means can have the opposite effect. Lenders are hesitant to lend to individuals with poor credit history and will most likely charge them higher interest rates.

Before using credit it is important to understand what you are signing up for and how much the credit will cost.  In this section you’ll learn more about:
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Cost of Credit: Just because you are approved for a loan or credit product does not mean you will be able to afford the payments.  Understand all costs (fees, interest rate, and other non-interest finance charges) and be sure that they fit your budget.

Credit Contracts: Once you sign on the dotted line you have entered into a legal contract.  Be sure you know exactly what you are agreeing to and that you are familiar with your rights and obligations under the credit contract.

Collection Agencies: If you owe money to a company and are not paying or are unable to make the minimum payment, the company may hand the debt over to a collections agency. Visit Collection Agencies to understand your rights and what the agency is allowed and is not allowed to do.

Credit Reporting Agencies: A credit reporting agency creates, maintains and collects information regarding your credit history from various sources such as banks, mortgage companies and credit card companies. Visit Credit Reporting to understand your rights and what these agencies are allowed and not allowed to do.

Debt Settlement Companies: A debt settlement company negotiates with your creditors to reduce your debts. Know your consumer rights before signing a contract with a debt settlement company.

Downloadable Resources

Credit Card infographic

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