CREDIT: What It Is and How It Works
Let’s talk about the basics. What is Credit?
Okay, great. Yeah. So the US banking system assigns are their citizens and you know, people hear a credit score. And that credit score is basically your likeliness of being able to pay something back from what you have borrowed. So, as simple as we can put it, your credit score, the higher it is, the more likely you are able to balance good credit, healthy credit, unhealthy credit. And that you are able to see those items back and have actually the understanding and the finances to back the money that you have borrowed.
So you're assigned essentially a credit a credit score, based on your credit report. And I said last time, your credit report is kind of like your, your medical history, your medical record, and from your medical record, you get a diagnosis. So your credit score is essentially your diagnosis. So you want to make sure that your medical history is healthy, is well that way you have a better diagnosis if you even need one. So if your credit report and your credit history is healthy and well balanced and well maintained, then your credit score will be as well and there are things like such as good credit and healthy credit and not all credit is bad credit. And so that's an understanding that a lot of people don't have because just the word credit alone is very, very scary for some people.