CREDIT Can you afford it and how will you pay? Understanding - PowerPoint PPT Presentation

UNDERSTANDING CREDIT Can you afford it and how will you pay?

Understanding ¡Credit Seminar Objectives Understanding Credit Qualifying for Credit Managing Credit Handling Debt Problems • The Meaning of Credit • What Lenders Consider • Credit Cards • Dangers of Excessive Debt • Types of Credit • Credit Reporting & Rating • Loans • How to Avoid Excessive Debt • Pros and Cons of Credit • Establishing Credit • Deciding When to Use Credit • Maintaining Good Credit

Understanding ¡Credit 4 ¡Types ¡of ¡Credit Revolving Installment Credit Credit Charge Cards/ Service Accounts Contracts

Understanding ¡Credit Advantages ¡and ¡Disadvantages ¡of ¡Credit ADVANTAGES: DISADVANTAGES: Convenient It’s a loan Immediate purchasing power Interest rate may go up No need for cash May include additional fees Bills can be consolidated Can be easy to overspend Can promote impulse buying

Understanding ¡Credit Who ¡needs ¡to ¡build ¡good ¡credit? Anyone Recent Young needing ¡to High-­‑school College Women immigrants adults get ¡“back grads students on ¡track”

Qualifying ¡for ¡Credit What’s ¡in ¡a ¡credit ¡report? Identifying information Job history Creditors; payment history Legal actions Inquiries you initiated

Qualifying ¡for ¡Credit How ¡is ¡your ¡FICO ¡Score ¡determined? 30% Amounts 10% Owed New Credit 15% Length of Credit History 35% 10% Payment Credit Mix History