Auto Finance Basics: What is Credit? | Auto Finance 101 | Ford

[MUSIC] What's up, guys? Lily here You know, people ask me complicated questions all the time like, what is credit? How do I know if I have good credit? And why would you reheat salmon in the office microwave? [NOISE] Lucky for you, I'm here to answer the first two

That's what I do Understanding credit is actually easier than you think You typically use credit to buy the things that you might not have cash for, and pay back a lender over time with interest Ready for more? Let's start with the basics There are companies out there called credit bureaus

They supply a report with a lot of info about your credit, like if you pay your bills on time, when and where you've applied for credit Credit bureaus also supply a credit score A credit score is a three digit number that helps lenders understand how responsible you are, just like grades you got in school Look, here is one of my old report cards, A in English, A+ in econ, A in math, [SOUND] no Typically, credit scores range from 300 to 850, 850 being the absolute best

Your credit report and credit score work together to help you get financing in the future When you have a good credit history and score, it's easier to get credit to buy the things that you want, like a house or a car, or these Now, there is a lot of ways to build good credit Pay on time Yup, that one's is important

Over spending, that can be a tough one Remember that time when you got so excited, and you bought that thing, and then when you got home you were like, why did I buy this thing? Don't do that again Only finance what you can afford, which leads me to my next point If life happens, and you can't make a payment, call your creditor, ASAP Late payments can be reported by your creditors and can impact your credit

To see how you're doing and get your report visit, AnnualCreditReportcom See, you've got this Now get out of here and go check your credit If you want to learn about what you can afford and if you're ready to buy or lease a new car, visit FordCredit

com [MUSIC]

Source: Youtube

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