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Knowing How and When to Borrow

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Sometimes it’s necessary to borrow for major purchases like an education a car, a house, or maybe even to meet unexpected expenses. Your ability to get a loan generally depends on your credit history, and that depends largely on your track record at repaying what you’ve borrowed in the past and paying your bills on time. So, be careful to keep your credit history strong.

Actions You Can Take

Track your borrowing habits.
Pay your bills on time.

When you need to borrow, be sure to plan, understand and shop around for a loan with a low Annual Percentage Rate (APR).
Learn about credit and how to use it effectively.

Pay attention to your credit history, as reflected by your credit score and on your credit report.
Hints and Tips

Borrowing money is a way to purchase something now and pay for it over time. But, you usually pay “interest” when you borrow money. The longer you take to pay back the money you borrowed, the more you will pay in interest.

It pays to shop around to get the best deal on a loan. Compare loan terms from several lenders, and it’s okay to negotiate the terms.

When repaying a loan, it may be better to pay more than the minimum amount due each month, so you will have to pay less in interest over the life of the loan.

One of your most important aids when shopping for a loan is the APR – the Annual Percentage Rate. This is the total cost, including interest charges and fees, described as a yearly rate.

Paying your bills on time will help increase your credit score.

Even if you fell into trouble with borrowing in the past, you can get on solid footing and rebuild your credit history by making regular payments as agreed.

You are entitled to a free copy of your credit report every 12 months from each of the three nationwide credit bureaus. Go to http://www.AnnualCreditReport.com or call toll free 1-877-322-8228 to order the free reports. Beware of imposter sites.

To learn more about budgeting, credit and personal finance, be sure to tune in http://cbsloc.al/ListenWAOK to “Financial Solutions with Rob Wilson” every Saturday from noon until 3pm.

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