It’s important to know common terms in the credit world. From APR to credit utilization, not knowing what these terms mean could cost you big time later. Check them out:
APR stands for annual percentage rate. While you may have heard that term before, most people aren’t sure what that consists of. The APR is the percentage of interest and fees you’ll pay on a credit card, mortgage or other types of loan throughout the year.
Credit utilization is how much of your available credit you’re using. It’s best to keep your credit utilization below 30%.
This refers to the different types of credit that make up your credit report. From credit cards and student loans to mortgages and auto loans, all of this has an impact on your credit.