Credit can be a useful tool that helps you to make major purchases, like a car or a house, by letting you pay for them over time. It is convenient. It can help in emergencies, and it is safer than carrying cash. Credit can also be dangerous if not used in the right way. It’s tempting to buy something using a credit card, even though you don’t have the cash to pay it back. If used too much, credit payments can add up quickly, leaving less money for your basic necessities.
When you use credit, you borrow money with the promise that you will pay it back over time. You will also have to pay the creditors a fee for using their money. Understanding how credit works is an important first step to take before analyzing your credit picture and applying for new credit. Next, reviewing your credit report helps you to analyze your current credit picture as well as your credit history. The Wisconsin Free Credit Report Campaign is an informative web page that includes answers to most credit-related questions and also offers you the chance to sign up for three reminders during the year (2/2, 6/6, and 10/10) to pull your credit report. Once you review your credit report for any concerns, you can take steps to start improving your credit.