TMCC Financial Literacy Guide

21 UNDERSTANDING CREDIT WHAT IS YOUR CREDIT, AND WHY DOES IT MATTER? When people talk about your credit, they mean your credit history. Your credit history describes how you use money. For example: • Howmany credit cards do you have? • Howmany loans do you have? • Do you pay your bills on time ? • How you handled your money and bills in the past will help lenders decide if they want to do business with you. Your credit history also helps them determine what interest rate to charge you. • If they see that you always pay your bills on time , and never take on more debt than you can pay back, they will generally feel more comfortable loaning you money.