A teen's guide to building credit By:Anthony Orr and Terry Morgan

Credit is a part of your financial power. It helps you to get the things you need now, like a loan for your car or your credit card, based on your promise to pay later. Working to improve your credit helps ensure you'll qualify for loans when you need them.

A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the credit worthiness of a person. Lenders such as banks and credit card companies use credit score to evaluate the potential risk of posed by lending money to consumers and mitigate losses due to bad debt. The numbers of a credit score represents the risk a lender takes when you borrow money. Credit scores normally range from 300 to 850, 850 being excellent and 300 being poor.
What is a credit report ? Who is involved in producing it?

A credit report is a detailed report of an individual's credit history. Credit bureaus collect information and create credit reports based on that information, and lenders use the reports along with other details to determine loan applicants' credit worthiness.

What factors make up your credit score?

The 5 factors that make up your credit score are, payment history which makes up 35 percent of the total credit score, credit utilization (30 percent), length of credit history (15 percent), new credit and credit mix which make up 20 percent of your total credit score (10 percent each).

Teens can maintain/build excellent credit card by not trying to rush into things and staying patient. I recommend that they get a credit card with a small credit limit. Over time they will be able to establish a higher line of credit if they demonstrate responsible use of the credit they are given.

Credits:

Created with images by geralt - "one hundred percent statistics" • cafecredit - "Excellent Credit Score" • cafecredit - "Check Credit Report" • cafecredit - "Credit Score - Dictionary 1" • Sammmie - "friends together hugs"

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