Business and economy news for kids of all ages primary, middle, and high school.
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“Today Shapes Tomorrow

 Published Every Monday Volume  12 (Special Edition)                       August 13, 2007
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What is Credit History?  Why is it important to have a good credit history? 

Credit is a trust that is built over time when you borrow money and pay it back on time as agreed.  Let us say, you wanted to buy the latest Harry Potter book but needed $10 more to buy it.  You go to your mother to borrow $10 and tell her that you will pay her back in two weeks.  At the end of two weeks there are few things that can happen.  

  • You did the chores around the house and made enough money to pay $10 back to her.  This helped to build the trust and if you keep building it by paying it on time you will have a good credit history and your mother will let you borrow money again. 
  • On the other hand, if you were unable to give the $10 back, you could ask for forgiveness since you do not have the money or ask for an extension.  As agreed, if you return the money, it will help to re-build the trust and your credit history.  However, if you make it a habit of not returning the money or keep asking for extensions, you do not build trust and your credit history.  As a result, you may not be able to borrow money from your mother any more.  

The same is the case when you grow older and borrow money from the bank.  Banks loan money if the borrower has a good credit history.  However, if there are concerns about the borrower’s ability to pay back or payment delays (borrower has bad credit history), the banks will not loan money.    

Good credit history allows people to borrow and buy things they need to improve their lives.  It is also good for the businesses and economic growth.  For example, you and many kids who bought the new Harry Potter book with borrowed money, helped to set the record sale for the book and the publisher, Scholastic made record money.  Companies like that a lot because it allows them to sell their products and services.    

Some-times, when people borrow more than they can save, it causes problem of delays and non-payment.  Many times people also run into health problems, family issues or lose their jobs to pay back their loans on time.  Whatever the reason, it is important to learn that not paying back loans is a serious matter. Therefore, it is important to learn about saving and responsible use of money with credit worthy good habits.  It is never too late to start on the right path!!

 

 

 

 

 

 

 

 

 

 
   

What is Economy?  The word economy means everything related to the production and use of goods and services in an area. On a daily basis we buy many things (products) that come from many businesses, such as, food, drinks, toys, cars, etc.  When we buy or not buy such products it affects businesses, economy and all of us.

What is a Business? Business offers goods and services to customers for money.  Businesses create jobs for people who work to make goods and or provide services for other who need them.  

 

Who are the Workers? The people who work at the businesses are also called workers.  Workers are paid money which they use to take care of their loved ones.  When these workers are paid money they pay some money to the governments, called taxes, so that the government can provide the services to the communities where we live such as schools, police, fire station, parks, roads, and many more. 

 

What are Goods? Goods are things that you can see, such as toys, balls, dolls, candies, cereals, etc.

 

What are Services? Services are things that are done for others for money, such as, barber gives you service of hair cutting, waiter serves you food at the restaurant, etc. 

 

We use multiple information resources, such as, websites, companies, stock exchanges, newspapers, libraries, and books.

Copyright © 2007 Akar Corporation.  All rights reserved.  BusinessNewsForKids.com