INCREIBLEhd

WHAT IS THE CREDIT?

Credit means that you are using someone else's money to pay something.
It also means that you are making a promise to repay the money. For example, if you get a loan to buy a car, you are using the money from the financial company to buy the car, and you are promising to pay the company by sending you a sum of money each month. A loan for the purchase of a car is an example of an installment sale.
There are different types of credit and each of them has different payment options:
Credit for installment purchases (for example, home or automobile credit). With the installment loan a contract is signed to repay a fixed loan amount in equal payments over a period of time.
Revolving credit (for example, bank credit cards or department store credit cards). The revolving credit gives you the option to pay all of your debt or make minimum payments each month. As you pay, you become available to reapply for a new loan.
Accounts open to 30 days (eg travel cards and entertainment). These accounts must be paid in full each month.


You can use secured or uninsured credit.


Insured Credit: It means that you must provide something of value, a collateral, to guarantee the payment of your debt. If delinquent in payments, the lender can take possession of the valuable asset that originally secured the debt. For example, a mortgage loan is a type of secured credit. Your home serves as collateral for the loan. If you do not pay the loan on time, the lender can keep your home. Other examples include: car loans, pawn shops, and title deed loans.
Unsecured Credit: It means that you did not have to present anything of value to secure the loan repayment. Unsecured credit allows you to buy items on credit in exchange for your promise to pay the creditor. The creditor has no guarantee, just your promise that you will pay him. They can not come later to take your car or your home to make you pay your credit card bill. Examples of unsecured credit include credit card debt, medical debts, and personal loans.