Credit Check

The words 'credit score' leave most people feeling uneasy. Never fear! We have some useful hints that'll help you use credit to your advantage.

- BY CHARNDRÉ EMMA KIPPIE

When it comes to significant purchases such as a car or a home, applying for a student loan, getting a credit card or even a cellphone contract, having a solid credit record is crucial.

Lenders need assurance that you are a reliable borrower who repays credit products on time before they agree to lend you money.

Without a credit record, you won't have a credit score - making it impossible for lenders to assess your credit risk and consider you for loans. Having a credit score is the most common way to qualify for credit. By starting with small loans that are easily accessible and responsibly paying them back, you build a good credit score for future bigger loans.

TYPES OF CREDIT

There are two types of credit you need to get familiar with. Secured credit involves borrowing against an existing asset such as a car or property. Examples of unsecured credit include store cards, credit cards and personal loans.