Credit

Credit - There’s No Such Thing as A Free Lunch

Learn credit statistics in America
Learn how to shop for a credit card
Know your debt-to-income ratio
Learn the warning signs of too much debt
Understand good debt/bad debt
Use a repayment calculator to understand “cost” of borrowing over time
Learn how to use your credit card responsibly
Understand credit reports and FICO scores
Learn how to order your free credit report
Identify ways to build and repair credit history
Learn about the new Fair Credit Report Act

Establish checking and savings bank accounts
Have a good employment history
H ave a good residence history
Have utilities in your name
Consider a department store card or gas card
Consider a secured loan
Consider a secured credit card
Find a co-signer

First, figure out which kind of credit-card user you are. Are you an
Emergency user
Revolver
Transactor If you’re one who likes to carry a balance, your goal is to find the card with the lowest interest rate possible, so you can pay off your debt ASAP.
http://www.creditcardguide.com/ http://www.bankrate.com/funnel/credit-cards/credit-card-results.aspx http://www.creditcards.com

APR (fixed or variable) (multiple APRs)
Grace period (20-25 days)
Annual fee
Cash advance fee
Balance-transfer fee
Late-payment fee
Over-the-credit-limit fee
Credit-limit-increase fee
Return-item fee
Other fees
World’s Worst Credit Card -- http://www.youtube.com/watch?v=FunpS4QXcRI&feature=related

Signed by President Obama on May 22, 2009. Goes into effect between now and February 2010. (Dirty Little Credit Card Secrets) http://www.youtube.com/watch?v=kHfN-YUkH1E&NR=1

$8,100
The average credit card debt in 2009 per household.
$3,262
The average amount of credit card debt carried over by a public university student at graduation.

14.71
The average interest rate charged by credit card companies .

43 The most recent Federal Reserve study shows that 43% of American families spend more money than they earn. 8 Number of consecutive years that more people have declared bankruptcy annually than graduated from college! 60 Percent of people who do not pay off their credit cards every month and instead carry a balance.

Good Debt
Secured Debt (usually for appreciating assets that increase wealth)
New home
College education
Usually a low interest rate
Bad Debt
Unsecured loans (for consumables and depreciating assets, like food, clothing, vacations, etc.)
Car loans
Credit cards
Usually higher interest rates

DTI Is your debt load compared to your income
Should be less than 36% (the lower the better)
Debt includes all recurring debt, mortgage (PITI), credit cards, loans,
Do not include food, utilities, gas in calculation.
10% or less Credit is in great shape. Loan applicants generally will be approved for low-rate loans. Will have no trouble getting credit cards. 11 - 20% Won't have trouble getting loans, but as people approach 20% they probably have too much debt. 21 – 35% Too much debt. Probably having trouble saving money 36-50% Need to develop a plan to get out of debt 50% + You need help. Make an appointment to see a credit counselor. econedlink.org

You don’t have any savings.
You only make the minimum payment on your credit balance.
You have more than 2 or 3 major credit cards.
You are charging because you do not have the money.
After you pay your credit card bill, you increase your balance by the same amount (or more) the following month.
You have at least one credit card that is near or over the credit limit.
You are occasionally late in making payments on bills, credit cards, or other expenses.
You don’t even know how much total debt you actually have.
You use cash advances from your credit cards to pay other bills.
You bounce checks or overdraw your bank accounts.
You’ve been denied credit.
You lie to friends or family about your spending and debt.

" My grandma used to say that if you're going to buy something that doesn't go up in value, and you can't afford to pay cash, then you can't afford it." If you eat it, drink it, or wear it, or it’s under $20, don’t use your credit card.

http://www.creditcardnation.com/calculator.html http://www.feedthepig.org/creditcardcalc http :// www.timevalue.com/calculators/credit-card-calculator.aspx

Highest interest rate first . Paying off the credit card with highest interest rate will save you money in the long run, especially if the highest interest rate credit card also happens to be the card with the highest balance.
Lowest balance first . There are immediate tangible benefits to paying off the credit card with the lowest balance first. The first balances are easier and quicker to pay off. When you finally pay off a bill, the feeling of accomplishment is motivation to keep you going. You can then apply that month’s amount to another credit card payment!

1 . Stop Borrowing!
2. Know Exactly What Debts You Have .
Prioritize Your Debts and Establish a Debt Payoff Plan .
4. Make Debt Payments Automatic.
5. Re-evaluate your lifestyle.

Identifying Information. Your name, address, Social Security number, date of birth and employment information are used to identify you
Account History. Detailed info about your accounts: balances, limits, payment history, including how many times and when you were 30, 60 or 90 days past due.
Public Record and Collection Items. i.e., bankruptcies, judgments, tax liens
Credit Inquiries. The inquiries section contains a list of everyone who accessed your credit report within the last two years.

Lenders
Insurance companies
Landlords seeking a credit check for renters
Credit card companies
Companies where you are seeking employment (only with your written consent)
Organizations considering your application for a government license or benefit (if the agency is required to consider your financial status)
State or local child support enforcement agencies
Government agencies (usually can only look at your name, address, former addresses, and current and former employers)
Other organizations you've initiated business with

Breaking down the numbers Score % of population Score % of population 300-499 2% 650-699 15% 500-549 5% 700-749 18% 550-599 8% 750-799 27% 600-649 12% over 800 13%

History of payment (35%) Are you paying on time?
Balance and available credit (30%) Are you keeping your balances low?
Length of credit history (15%) How long have you had accounts?
Number of accounts and types of credit held (10%) Do you have too many open accounts?
New credit (10%) Do you apply for credit everywhere?
Someone’s watching your credit activity…are you?

Pay your bills on time (the longer you pay your bills on time, the better your score)
Keep balances low on credit cards and other “revolving credit”
Pay off debt rather than moving it around
Don’t close unused credit cards as a short-term strategy to raise your score.
Don’t open a number of new credit cards that you don’t need, just to increase your available credit.
Note that closing an account doesn’t make it go away.
Minimize the number of inquiries.
If you have a bad credit history, consider opening new accounts and then paying them off on time.
http://www.youtube.com/watch?v=_Nd3ol6lLWQ http://www.youtube.com/watch?v=Sd8y9R36gcg&NR=1

Get free credit report annually from Equifax, Experian, and TransUnion
Order from all three at once; or each at different times
Note: you must “purchase” your credit (FICO) score
If you are turned down for credit or if there is a fraud issue, you can get a free report at any time.
Freecreditreport.com and others charge a “membership” fee for credit report and score.

BEWARE, if:
Want you to pay for credit repair services before any services are provided
Do not tell you your legal rights an what you can do yourself– for free
Recommend that you not contact a consumer reporting company directly
Suggest that you try to invent a “new” credit report by applying for an EIN to use instead of your SS#
Advises you to dispute all info in your credit report or take any action that seems illegal

Credit

by Irma_Miller_11344 on Aug 27, 2009

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Credit — Presentation Transcript