The 1-2-3 Money Plan: The Three Most Important Steps to Saving and Spending Smart

Chapter 6Credit When Credit’s Due

Credit is an increasingly important component of money management nowadays, whether you borrow money or not. That’s why it’s important to care about your credit reports, your credit scores, and your credit cards, if you use them.

This has never been truer since the whole financial world started to reexamine the loose lending standards that led to tumult in the financial markets in late 2008. The days of easy credit, given to anybody who can fog a mirror, are gone.

Credit scores are intended to define how creditworthy you are. Can lenders trust you to pay back borrowed money on time? That’s all creditworthiness is. The more trustworthy you are, according to a credit-scoring formula, the more likely you’ll get ...