Consumer Credit File
You have a credit card so that you can buy those amazing products you see on your television at 4 am. You have an auto loan so that you can drive to that sweet job working for the guy who spends all his time on the golf course. And your mortgage will eventually be paid off after 30 years.
All of those debts are listed on your consumer credit file. Credit agencies keep track of every dollar you spend...yet, for some reason, that’s not a perverse violation of your private data, and no one seems to care when they get hacked and lose all of your data.
This credit file is used by other lenders to decide if they'll loan you money, what rate you would pay, and the time periods that you'd have to pay off said loans.
Related or Semi-related Video
Finance: What is a Credit Limit?39 Views
Finance, a la shmoop. What is a credit limit? Alright people well simply put the
maximum amount you get to charge or use on a loan or credit account, that's a [Credit limit definition written on a 100 dollar bill]
credit limit. So yeah it's that thing that keeps toddler Joey from ordering
two hundred thousand dollars worth of Snickers bars. [Toddler looking at the snickers bar]
If you accidentally you know leave out your Amex. (Illustrative example time) If you have a ten thousand
dollar line of credit or credit card you can't spend $20,000 on a trip to Vegas,
sorry. You might be able to go on a smaller trip to Atlantic City but once [Picture of Atlantic City]
you hit that 10 grand well the party's over until you pay some of that money [$10,000 flashing in red]
back, and by the way taking that smaller trip and then putting everything on red [Chips landing on a roulette table]
22 in hopes of funding your next trip to Vegas? Probably not the soundest
financial planning... sorry, let's keep it real. [Guy putting on a serious face]
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