Question

In 100-200 entry responding to these questions.

1. Do you use credit in the form of credit cards or other forms of lending? Why or why not?

2. What personal convictions do you have about the use of credit?

3. What personal challenges do you see in yourself in the use of credit?

Answer 1

Answer1.

Credit ialso irefers ito ithe icreditworthiness ior icredit ihistory iof ian iindividual ior icompany. iIt ialso irefers ito ian iaccounting ientry ithat ieither idecreases iassets ior iincreases iliabilities iand iequity ion ia icompany's ibalance isheet.

1. Credit iis igenerally idefined ias ian iagreement ibetween ia ilender iand ia iborrower, iwho ipromises ito irepay ithe ilender iat ia ilater idate—generally iwith iinterest.

2. Credit ialso irefers ito ian iindividual ior ibusiness' icreditworthiness ior icredit ihistory.

3. In iaccounting, ia icredit imay ieither idecreases iassets ior iincreases iliabilities iand iequity ion ia icompany's ibalance isheet.

Personal iloans iand icredit icards iboth ioffer ia iway ito iborrow ifunds iand ihave imany iof ithe isame istandard icredit iprovisions. iIn iboth iloan iand icredit icard iagreements iyou iwill itypically ifind ifunds ioffered ifrom ia ilender iat ia ispecified iinterest irate, imonthly ipayments ithat iinclude iprincipal iand iinterest, ilate ifees, iunderwriting irequirements, iamount ilimits, iand imore. iMishandling ieither itype iof icredit ican iundermine iyour icredit irating, icausing iproblems iwith iloans, iaccess ito igood ihousing, ifinding ijobs

i i i i i i i i i i i i i i i i i i i i i i i i i i i i i iCredit icards ifall iinto ia idifferent iclass iof iborrowing iknown ias irevolving icredit. iWith ia irevolving icredit iaccount, ithe iborrower itypically ihas iongoing iaccess ito ithe ifunds ias ilong ias itheir iaccount iremains iin igood istanding. iRevolving icredit icard iaccounts ican ialso ibe ieligible ifor icredit-limit iincreases ion ia iregular ibasis. iInterest irates iare itypically ihigher ithan ipersonal iloans.

i i i i i i i i i i i i i i i i i i i i i iIn igeneral, icredit icards ican ialso ibe iunsecured ior isecured. iUnsecured icards ioffer icredit iwith ino icollateral. iSecured icards iare ioften ian ioption ifor iborrowers iwith ilow icredit iscores. iWith ia isecured icard, ia iborrower iis irequired ito iprovide icapital itowards ithe icard’s ibalance ilimit. iSecured icards ihave ivarying iterms iso isome imay imatch ithe isecured ibalance, isome imay ioffer ian iincrease iafter ia ispecified iamount iof itime, iand isome imay iapply ithe isecured ibalance ito ithe icard ias ia ipayment iafter iseveral imonths.

a. Personal iloans ioffer iborrowed ifunds iin ione iinitial ilump isum iwith irelatively ilower iinterest irates; ithey imust ibe irepaid iover ia ifinite iperiod iof itime.

b. Credit icards iare ia itype iof irevolving icredit ithat igive ia iborrower iaccess ito ifunds ias ilong ias ithe iaccount iremains iin igood istanding.

c. Credit iscoring iis ia ikey ifactor iinfluencing iapprovals iand iterms ifor iboth ipersonal iloans iand icredit icards.

d. Personal iloan iand icredit icard iagreements ican ibe istructured iwith ia iwide ivariety iof iprovisions iand iterms.

Loans iand irevolving icredit icards imake iup ia isubstantial imajority iof ithe itotal icredit imarket. iHowever, ibeyond ijust istandard ipersonal iloans iand icredit icards ithere ican ialso ibe iother icredit iproducts ifor iconsideration.

1. Business iLoans iand iCredit iCards

Business iloans iand ibusiness icredit icards ican ibe ian ioption ifor iall itypes iof ibusinesses. iBusiness iloan iunderwriting iusually iinvolves ianalysis iof ifinancial istatements iand iprojections. iBusiness icredit icards ican ibe isomewhat ieasier ito iobtain iand ioffer ithe isame iadvantages ias ipersonal irevolving icredit icards.

2. Payday iLoans

Payday iloans iare ioffered iwith iextremely ihigh iinterest irates. iBorrowers iuse iemployment ipay istubs ito iobtain iadvances iin icash. iPayday iloans ican ibe iconsidered ipredatory iloans idue ito itheir ireputation ifor iextremely ihigh iinterest iand ifees.

Answer2.

When ilooking ifor iadvice ion iwhat ithings imay iaffect iyour icredit ihistory, ithere iis ialways ithe irisk iof iencountering imyths. iSome iof ithis iadvice imay ibe iwell iintentioned ior ieven iseem ilogical, ibut ia ilot iof ithe itimes iit ican ilead ito iactions ithat ido inot ihelp iimprove iyour icredit ihistory iand ithat ican isometimes ieven imake iit iworse.

i i i i i i i i i iThere iis ino isuch ithing ias ia iuniversal ior ioverall icredit iscore. iWhen iyou iare igiven ia iscore iby ia ilender ior iby ia icredit ireference iagency, ithey iare iusing ithe ispecific iinformation ithey ihave iavailable ito icalculate ithat iscore. iThey ieach imay ihave idifferent iways iof iformulating ia iscore ior imay ihave iaccess ito idifferent iinformation. iYour icredit iscore iis ia inumerical iinterpretation iof iyour icredit ihistory iand ias isuch ican ivary.

Neither icriminal irecords inor ifines iare iincluded iin iyour icredit ihistory. iWhat iwill ibe iincluded iare icounty icourt ijudgments i(CCJs) i– iwhich ican ibe itaken iout iby isomeone iyou iowe imoney ito iin ithe ievent ithat iyou ido inot irepay. iThese iwill iremain ion iyour icredit ihistory ifor isix iyears iafter ithe ijudgment iis ipassed.

Answer3.

Financial iproblems iand ichallenges ihappen ito ieveryone iat isome ipoint, iand ithe istress iand iworry ican iget ito iyou. iHowever, irealizing ithat ithere iis ialmost ialways ia iway iout ican ihelp iyou inot ifeel iso idepressed. iYou imay ibe iable ito ifind ithe iway iout iyourself, ior iyou imay ineed isomeone ielse's iperspective ito ihelp iyou ifind ia isolution. iBelow iwe’ll ishow iyou ihow ito iovercome ifinancial iproblems iand idifficulties iand iease iyour istress.

a. Identify ithe iUnderlying iProblem iThat's iCausing ithe iDifficulties

The ifirst istep ito iovercoming ifinancial iproblems iis ito iidentify ithe iunderlying iissue ithat’s icausing ithe ifinancial idifficulties. iFinancial iproblems iare iusually ia isymptom iof ia ibigger iissue. iTo icome iup iwith isolutions ithat iwork iin ithe ilong irun, itake ithe itime ito iidentify ithe ireal isource iof iyour ifinancial itroubles. iYour iproblem imay inot ibe ilisted iabove ior iit imay ibe imore icomplex. iHowever, ithe iconcept iof iidentifying ia ispecific iproblem iis iimportant ibecause iit iis imore ilikely ito iresult iin ia ilasting isolution.

b. Create ia iBudget i- iSpend iMoney iin ia iWay iThat iHelps iSolve ithe iProblem i

One iof ithe ibest iweapons ifor icombating ifinancial iproblems iis ia ibudget. iA ibudget iis ia imonthly ispending iplan ifor iyour imoney. iCreating ia ibudget iis ilike iturning ithe ilights ion ito ifind iyour iway iaround ia idark iroom. iYou ino ilonger ineed ito iwander iin ithe idark; ibanging iyour ishins, itripping iover ithe ifurniture, iand istepping ion ithe idog. iInstead, iwith ithe ilights ion, iyou ican isee iwhat’s igoing ion iand iprevent iproblems ibefore ithey ihappen. iA ibudget iworks imuch ithe isame iway; iit iguides iyour ispending idecisions iso ithat iyou're ispending imoney ion iwhat's ireally iimportant ito iyou. iIn ithis icase, iyou'll ispend iyour imoney iin ia iway ithat ihelps isolve iyour ifinancial iproblem.

c. Determine iFinancial iPriorities ito iGuide iYour iSpending iChoices

To iovercome ifinancial iproblems iand isolve iyour idifficulties ifor igood, iyou ineed ito idetermine iwhat iyour ipriorities iare. iSome imight ibe iclear-cut ifinancial ipriorities, ie.g. ito ipay ioff iyour icredit icards. iOthers imight ibe ilifestyle-goals, ibased ion iyour ivalues, ie.g. isave iup ifor ihouse irepairs iso ithat iyour ifamily ihas ia inice iplace ito icall ihome.

d. Identify iSmall iSteps iYou iCan iTake ito iAddress ithe iProblem i& iAchieve iYour iGoals

The isolution ito ifinancial iproblems iis ioften ito ireduce iexpenses, iincrease iincome, ior ido isome icombination iof iboth. iThis imight inot ibe isomething iyou iwant ito ido, iand iyou’re inot ialone. iMost ipeople idon’t iwant ito imake ichanges ito itheir ilifestyle, ibut ifaced iwith ithe ichoice iof iongoing imoney itroubles, ior imaking iseveral ismall ichanges ito iease iup ion ithe ifinancial istress i- imost ipeople iare igame ito itry.

e. Develop iYour iPlan ito iOvercome iFinancial iProblems ifor iGood

Once iyou’ve icome iup iwith isome iideas ifor ihow ito ibegin itackling iyour ifinancial iproblems iand idifficulties, iyou ican iput itogether ia irealistic iplan ito iaccomplish iyour igoals.

f. Review iHow iThings iare iGoing

The ilast istep itakes iplace ionce iyou iare ia ifew imonths iinto iworking ion iyour iplan. iEvery ionce-in-a-while, itake ia ifew iminutes ito ireview ihow ithings iare igoing.

Overcoming ifinancial iproblems iand idifficulties iisn’t ieasy, ibut iby isetting isome iclear ipriorities ifor iyourself, iidentifying iways ito iachieve ithese igoals, iand ipersevering iwith iyour iplan, iyou ican iovercome ithe ichallenges iand iat ithe isame itime, iput ian iend ito ithe ifinancial istress.