Have you ever wondered how people could afford to purchase the “big” things like houses and property or cars without paying full price upfront?
At Kenwood High School the topic of the importance of things like credit has come up. Here at Kenwood Ms. Rodier focuses on the importance of understanding credit in her course, Personal Finance and Economic Theory. “The earlier off you establish your credit the better off you are but it’s important to know how to establish good credit as your credit score is a measurement of your ability to pay a creditor back.”
Kenwood’s financial bookkeeper, Ms. Hott agrees it’s so important for students to understand credit. “A credit score is something that shows where your financial assets are. Like your debt per credit ratio, when your credit score is calculated they take how much debt you owe and that’s how much you can spend in credit,” shares Ms. Hott. “I think that’s great, teaching how credit works, how financial institutions work, how they charge you interest.”
In a world where financial success often hinges on access to credit, many remain unaware of its power over our dreams and how it can affect our day-to-day lifestyle. Dreams could easily be turned into nightmares with the wrong credit plan and even if you have the right amount of money. You could be left unable to afford the wants along with the necessities in your life. Things like tuition for college, starting a business, arrangements for travel, taking care of an unexpected expense.
Credit is overall a crucial part of modern living; it impacts everything from financial stability to power. Regarding a credit score, it is essential for securing loans, credit cards but it also influences the interest rates and access to various products.
As young people about to embark on building our credit for the first time it’s important to know the ways to start establishing good credit. UC Berkeley shares tips on starting adulthood off with good credit. “Open a checking and savings account, pay bills on time, pay down outstanding balances, check credit report yearly, protect your identity.”
Ms. Rodier’s class is a great starting point for students to dip their toe in the water of credit they will soon enough find themselves in in the near future.
As students get ready to embark on the real world that awaits them outside Kenwood’s doors, it is vital to understand the importance of credit and how to maintain good credit.
Credit cards can be a double-edged sword so it’s important to learn how credit works in order to build good credit and avoiding the pitfalls of credit card debt is essential. The more we know the better prepared we can be to succeed.
