What is Credit? — Credit is an agreement that you make with a lender. It allows you to obtain goods or services now, and 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 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 You Sign
Before using credit it is important to understand what you are signing up for and how much the credit will cost. Within New Brunswick, lenders are required by law (Cost of Credit Disclosure Act) to clearly disclose the true cost of borrowing as well as your rights and responsibilities in their credit contracts. Here are some tips and resources to concider before signing on the dotted line.