When you’re 18 years old the last thing on your mind is credit – we’ve been there. Keep in mind your credit score is what will lenders will use the rest of your life to know if you’re trustworthy enough based on your finances.
All lines of credit fall into one of two categories – an installment loan or revolving credit. Neither one of them is “better” than the other. In fact, it’s actually great for your credit score to have a few lines of credit within both categories.
A “credit limit” is the maximum amount that your credit card company will allow you to put on your credit card at one time. The difference between this and your outstanding balance is called your available credit.
To put it simply, a charge-off is a debt that a creditor gives up trying to collect after you’ve missed payments for several months. These can be any balance from a mortgage, credit card, doctor payments, and any other debt that you have.
One of the primary pieces of advice that you will see when researching any sort of financing or credit building is to check your credit score and reports. At Teen Finance Tips, we highly recommend this as well.