Managing finance is not an easy thing, finance is one of the most important things because it involves human life. During this time, of course, there are many methods that we have used to be able to meet the financial needs of everyday life, ranging from saving to investing. And of course you feel conscious, if there are times when we experience shortcomings in financial matters while needs continue to exist every day. Usually if it’s like that then we will know the word credit. Everyone knows what credit is? This time we will discuss credit as well as how to check credit scores because this turns out to be very important to know by each person. So, let’s check this out!
What is credit?
Surely you are familiar with the word credit, because maybe almost all of us have done credit. This time in the first point we will discuss the definition of credit so that you can find out more about credit. Credit comes from the Greek “credere” which means it is the belief in the truth in everyday life. While the notion of credit is our ability to carry out a loan or purchase with a promise and payment will be carried out at a predetermined and agreed time period.
Usually credit is stated in a form of agreement that is written both materially and in writing. And credit does not go away, but in the process of credit this is usually the proponent or the borrower is required to fulfill obligations as a guarantee of security, whether it is the nature of objects or non-objects. Now you already know not the definition of credit? We will explain other information that is not less important than credit so you can really understand the meaning of credit.
Principles of credit
After knowing exactly what credit means, this time we will invite you all to know the principles of credit. As a layman who may not know much about economics and finance, we are obliged to know what the principles of credit are needed. Usually so that an applicant can apply for a credit then there is a procedure that has been determined by the bank or the lender and usually so that credit can run smoothly there are several principles, here are some credit principles that you should know:
- Character
Principle The first credit that you should know is a character, a character is the willingness or character of a person who becomes an applicant or applicant to fulfill the obligations previously promised. What is examined is usually the characteristics of the applicant, then the applicant’s habits in payment of previous credit, personality, to the applicant’s lifestyle, to the family situation or the economic situation of the applicant.
- Capital
The second principle is capital, capital is a capital owned by a prospective applicant or debtor when they apply for a credit loan to the bank or the borrower.
- Capacity
Of course as credit applicants we will be obliged to pay off our credit for a certain period of time. This is also called capacity in the principles of credit. Capacity is the applicant’s ability to settle or pay off obligations that are reviewed from the business activities carried out by the applicant. So in this principle, it has the intention of judging. More precisely to assess the extent to which the applicant’s business results, if it is possible with the business the applicant is able to pay off or fulfill credit obligations in accordance with the grace period in the credit agreement agreed by both parties?
- Collateral
Almost all types of loans or loans definitely need collateral so that the borrower can trust us when bad possibilities occur, for example when you cannot pay your credit. The next principle is collateral, collateral is the items that we give to the party who gives us credit, or the bank as collateral for the credit they give us. Every credit is like having a guarantee, so that credit does not become risky.
- Condition of economy
The next principle of credit is a condition of economy which is a condition, social, cultural, and economic that affects the state of the economy at a time and for a certain period of time which will likely affect the smoothness of the company which will later obtain credit.
- Construction
The last principle of credit is a constraint, for this point it explains that the debtor’s valuation can later be influenced by obstacles that do not allow a person to do business somewhere.
Those were the six principles needed to carry out credit. Indeed, maybe we think if credit is one thing in finance that is quite simple, but pay attention to many details. In order for credit to run smoothly and in accordance with existing procedures, we must pay attention to the principles that we have previously told you at the top point.
Do you need to know your credit report?
We have discussed two important points regarding credit, namely the first is the definition of credit and the second is the important principles of credit. After knowing those two points, of course, you have now begun to be clear about what credit is right? This time we will inform you about, whether or not we need to know about our credit report or credit score? Is that important?
The answer is important, knowing your credit score or personal credit report is one of the important things you can’t just ignore. There may be some people who underestimate credit reports, even though this is a very important thing that can support you to later have a loan again. Because later when you want to make a loan or credit to the bank or other creditors, such as maybe you want to make a personal loan, mortgage, or apply for making a credit card then the thing that will be a reference is your credit score report. What creditors do is check your credit score, if they have reached 0 they usually want to lend.
From your credit score, the creditor or the party who will give the loan can find out how responsible you are to the credit or loan capital provided in the past to you. Therefore, you should not be confused when the lender may later ask for your documents regarding credit scores when you will later apply for a loan. This is a natural thing and even the legal issuer can ask for your documents in order to check your credit score.
You need to know a few facts before you want to do credit related to your credit score. Usually, if you have a high score, the more likely your credit request will be received and you will get a loan. But the lower your credit score, the more likely the possibility of a loan being accepted will be smaller. Now you all know, how important credit scores are and how they affect the success of your credit loan?
How to find out a credit score?
Now you all know the definition of credit, then also know the principle of credit to find out how important and the influence of credit scores on the success of the loan that we submit. Now, we will inform you of information that is no less important than you, how do you find out the credit score that you have? A credit score is a very important thing and you will definitely need it at any time, so we recommend that you immediately make a document regarding the credit score. We will show you a number of ways that you can do to find out your credit score:
- Using a special application
Now this time is getting easier because it’s sophisticated so we can use it to help our needs. For those of you who don’t want to bother checking your credit score, we recommend that you use a special application or credit monitor application that allows you to know your credit score. For example, you can use MoneySuperMarket because this application gives you your credit score and credit report for free.
All you need to do first is by registering, after you have registered, the application will tell you in detail the report about your credit score. The added value of this application is, in addition to being able to present in detail the data we need regarding their credit score also provide some important tips so you can increase the value of your score so that it will benefit you in the future. In addition, using this special application can also help track credit scores whether it is up or down.
At MoneySuperMarket we can also see a summary of the credit and balances on your credit card, how much credit you have used, and how much credit you have to pay. Apart from this application there are still many other types of similar applications that can help you find out your credit score.
- Do checks independently
In addition to using special applications, if you do not want to use the application, we recommend that you do an independent check. Doing an independent check can be done by checking your credit card, or maybe checking directly into a financial institution or bank where you often make credit or transactions. Especially now that we can find financial institutions or banks that start giving credit scores to their customers, so we no longer need to manually check but only need to ask for documents. We only need to come to the bank to ask for a statement about the document that contains our credit score. We can access the documents online by logging into your account. This can make it easier for you who want to know the credit score and may want to make a loan or credit.
- Buy credit scores
To find out the credit score you have, you can not only do it by using a special application or using the service features of the bank. But you can also take advantage of other ways, namely by buying credit scores directly from the main credit bureau because there are usually some who sell credit scores. One of the institutions that sell credit scores is FICO. If you may be lazy to use a special application or may be lazy to queue at the bank to ask for your credit score document we recommend that you buy a credit score. If you are confused about where you can buy it, we recommend that you check it on the internet because many credit institutions provide credit scores.
- Using credit score calculation services or credit rating sites
The last way you can do to find out what your credit score is is by using a site or credit score calculation service that we can find on the internet. You can use a credit score calculation service on the internet, there are those who offer sites that can monitor customer credit by paying monthly to annual fees. Besides being paid, there are also online sites that offer our credit calculations free to users. You can make good use of the online site. We recommend that you choose a service site that suits your needs. But usually the credit score calculation service that has paid or premium has more advantages compared to the free score calculation service site. In accordance with the needs and budget that you have.
That was some information that we can tell you all about how to know or calculate your credit score. As we have already told at the point above, if knowing credit score is one of the things that is very important because the credit score is useful as a reference for further credit. Because surely the lender will see your credit history, they will use your credit score document as one of the final considerations whether they will give credit to you or not. Hopefully the article that we provide this time can be useful and also useful for you all!
