Learning Center
Basic Finance
How Credit Affects You
Preparing for Home Ownership
Steps for Buying a Home
Life as a Homeowner






 
Additional Resources
Module 2
How Credit Affects You
Basics of Credit
line
< PREVIOUS | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | NEXT >

Did You Know
  • Good credit can help you get a loan, a job, an insurance policy and more.
  • Achieving the right balance of credit is important.
  • If used carelessly, credit can cause chaos in your life.
line

What is Credit?
A Promise to RepayCredit allows you to borrow money in exchange for a promise that you will repay the money at a later date. For example, if you get a loan to buy a car, you are using a bank or finance company’s money to purchase the car and you promise to repay them by making monthly payments. In addition to repaying the money borrowed, you typically also have to pay interest and certain fees.

Advantages and Disadvantages
There are advantages and disadvantages to credit. Credit is more convenient than cash and lets you buy items immediately even if you don’t have enough cash to purchase an item outright. However, credit comes with a price — the payment of interest charges and fees that can add up quickly. Credit can also make it easier for you to spend money you don’t have and to build up increasing amounts of debt that become harder to pay back.

Why Credit?

It Proves You're ResponsibleEveryone needs some credit to demonstrate a positive credit history. You can build a positive credit history by making debt payments on time. You may not realize it, but a good credit history is important not just for getting loans and credit card approvals, but also for leasing an apartment, getting a mortgage or an insurance policy, landing a job and much more. Landlords, insurance companies and employers — not just banks — check credit records for proof you can handle credit responsibly, and amongst other reasons, to gauge your personality characteristics and tendencies.

< PREVIOUS | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | NEXT >
  Countrywide Home Loans, a division of Countrywide Bank, FSB is an Equal Housing Lender. © 2007 - 2008 Countrywide Financial Corp. Trade/service marks are the property of Countrywide Financial Corp., and/or its subsidiaries. All rights reserved. The content of this website is provided for the convenience of our readers and is for informational purposes only. Readers are encouraged to use the content of this website to supplement their knowledge and to also seek out other reliable sources of information prior to engaging in the home financing and home buying processes. The information featured herein is intended to be accurate and we will make efforts to keep this website updated. However, due to the rapid changes occurring in the programs, products, services offered within the home financing industry, we do not guarantee the accuracy of the information presented. Countrywide is not responsible for the contents of, or products or services offered on, third party Web sites and provides links to such sites solely for your convenience. This is not a commitment to lend. All rights reserved.