im embarrassed to admit that my knowledge of how credit works is slim. so i have a few questions:
1. why do credit scores only go up a certain amount at a time, but if you don’t make a payment on time, it can plummet 50 points? (just an example)
2. What is a “credit line for cash”, and how does that work?
3. What deeply impacts your credit?
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1.) if you think of a credit score as a measure of how trustworthy you are to pay it back, it only takes one small thing to really negatively impact trust. My wife could remain faithful for me for 15 years, but if she goes out one night and makes out with another guy, my trust is deeply, deeply damaged and it’s gonna take a long time to rebuild.
2.) I’ve never heard of this and not sure what you are referring to. What you may be referring to is a type of card that you more or less pre-pay. Kinda like a debit card, but it is reported as a credit card. Some people use things like this to build credit when they don’t have it and/or make sure they control their credit card usage as they can only spend the amount on the card.
3.) Lots of things do. Biggest thing is just paying your bills on time as agreed. Missed payments, etc ding your score really bad. If you want to build credit, the best thing you can do to start off is get a cheap, low-limit card, and pay it in full every month.
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