Understanding Credit Systems and Financial Management: A Reflective Analysis of Personal Learning Outcomes
Overview
This reflection paper documents the author's learning from an educational video about credit systems and financial management. The author discusses key insights about credit building, credit scores, lending practices, and the prevalence of credit-based purchasing in the American economy, along with how these lessons have changed their perception of personal borrowing.
What this reflection paper covers
- Initial insights on credit building and credit score importance
- Surprising statistics about credit usage in America and lending criteria
- Personal perception changes regarding loans and credit utilization
- Unanswered questions about collaterals, verification, and guarantors
- Summary conclusions on credit-based economies
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Reflection
This video has given me great lessons and insights that I am sure will go a long way helping me in managing my credits and finances. Some of the compelling things that I learned is that the process of building credit is very important in ensuring that I have a good credit report that will help me in accessing loans. Taking one wrong turn will prove tough to get back to the right credit rating since the negative record stays on for more up to seven years. The other compelling thing I learned is that over seventy percent of total purchases done in America are made using credit. This means that most people are living on credits.
Another compelling thing I learned is that many lenders look at one’s credit score before resolving to lend them money. People with the highest scores qualify for more loans than those with the lowest scores. What even amused me is that if you have never taken credit or a loan then you do not have a credit score. I also learned that there are many things to consider before giving someone a loan, whether a friend or not.
These few things stuck to my mind because they are issues, I thought otherwise about them. For instance, I thought that credit score is high for someone who has never taken a loan before, only to get shocked that there is no score at all.