Money Talks E6: Understanding Credit

Phishing alert: We’ve received reports of SELCO impersonators calling members about fraudulent transactions. As a reminder, SELCO will never contact you requesting login information or to initiate wire, cash, or Cash App transactions. If you receive one of these calls, please hang up immediately.

Important Takeaways

Credit comes in two varieties:
- Fixed credit. You borrow a specific amount of money that you’ll pay back over a set timeframe. Think car loans and home loans.
- Revolving credit. Instead of a set term, this type of credit continues until you stop using the account and it is closed. A credit card uses revolving credit.
Getting a loan or credit card often comes down to your credit score, which is calculated by one of three credit bureaus. The higher the credit score, the less risky the loan will be considered by the lender.
There are many ways to build credit, including having a checking or savings account in good standing and consistently making payments on time.

There’s a lot to consider when it comes to credit. The more you understand, the more you can use credit to your advantage.