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TERMINOLOGY

There are many different credit questions that people have when they do not have any experience with credit. Here are a few of the most commonly asked credit questions and answers.

What Are the Different Types of Credit?

Even though the basic idea of credit is the same, there are different types of credit that you can get. One type of credit is known as revolving credit. Revolving credit is issued by using a credit card. This type of credit allows you to charge things and maintain balances on your card until you pay them off. The interest is going to be calculated on your balance every month to determine your payment.

Another type of credit that you can get it is a secured loan. This is the type of loan that you will get with a mortgage or an auto loan. This means that the loan is secured with some type of collateral that can be collected if you do not make your payments. Typically, secured loans are going to have the lowest interest rates available.

You can also get unsecured loans. These are personal loans that are not secured by any type of collateral. In order to get these loans, you typically have to have a solid credit history and the interest rates are going to be high.

How Do You Begin Establishing Credit?

If you want to get started using credit, you are going to have to establish your credit profile. In order to do this, you should consider applying for a credit card. When you get your credit card, make a few small purchases with it and then pay the balance off before your due date. If you do this every month consistently, you are going to start to develop a good credit score. When you continually make your payments for everything on time, this is going to help build your credit score up.

How Do You Get a Credit Report?

An important part of your credit is monitoring your credit report. Many people are unsure of how to get a copy of their credit reports. You can actually get a free copy of your credit report every year from the three major credit bureaus. You can visit the websites of TransUnion, Experian, and Equifax in order to request a copy of your credit report. If you get one of these free credit reports, you are not going to be able to see your credit score. Instead, you are just going to see the basic information about your credit history. If you want to see your credit score, you are going to need to go to the FICO website and purchase your credit report from them. You can actually purchase a copy of your credit report from all three of the major credit bureaus as well as get a copy of your credit score. When you do this, you are also going to get detailed information about what you can do to improve your score.