A crash course on credit | Student

What is credit and how does it work?

Credit is an agreement between you and a lender, often a bank.

When you have credit, you can spend money with the lender's trust that you'll pay it back later.

Loans, lines of credit, and credit cards are common ways to borrow money and access credit.

When you spend money on credit, you have to pay it back within a time period the lender chooses. If you don't pay on time, you'll be charged a fee called interest on the amount you owe.

Why do I need to build a credit history?

Your credit history is a record of your financial decisions. When you want to borrow money for a big purchase down the road, lenders want to make sure you’re a responsible borrower.

How to maintain good credit

Only spend what you know you can pay back

Pay your bills and loans back on time

Make frequent payments

Set a reasonable credit limit

Don't exceed your limit

To help you establish good habits, you can set alerts for your CIBC credit card to remind you to pay bills and stay on budget.

How to check your credit score

You can get your full credit report from reporting agencies such as Equifax and TransUnion.

You can also see your credit score instantly on the CIBC Mobile Banking® App, for free! Your information is safe and secure so you can keep an eye on your finances without worrying.

How is my credit score calculated?

If you have a credit card or student loan, you have a credit history. Reporting agencies take your financial history into account and assign you a credit score.

Your score is determined by:

the amount you owe
your payment history
how long you've been using credit

Keep reading for more money tips

Credit card basics

Credit cards come with responsibilities. Here's what you need to know.

Savvy saving tips

Your savings don't have to be big, but every little bit counts.

Getting smart with budgeting

Create a budget and stick to it so it pays off in the long run. Find out where to start.