Page 25 - Everything You Need To Know About Personal and Business Credit by Adrean Yancy

Everything You Need To Know Abour Personal & Business Credit
Types of Credit and Funding

There are three types of credit which are Open, Installment, and Revolving credit. Each
of them di ers from the other. Let us take a glance at what each represents and which
is best for your business.

1. Open Credit: Open credit is also called Charge credit. This type of credit line is
not common. It requires paying back in full monthly to avoid being penalized and
does not come with an interest rate. You must also know that this type of credit
should not be mistaken for or muddled with credit cards.

2. Revolving Credit: This line of credit enables you to borrow but has a speci c
credit cap limit to which you can borrow, and it often incurs charges. However, it
allows you to pay back monthly. Examples of this will include personal credit,

credit card, and HELOC.

3. Installment Credit: With installment, you must pay monthly a xed amount on
loan taken. You are given a speci c timeline and a xed amount to complete
your loan payment.

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