Moneywise Lesson

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This is a basic slideshow about the costs and benefits of credit. Especially informative for young adults or those who are applying for credit for the first time.

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Moneywise Lesson

  1. 1. Money Wise CreditFrom debt to wealth<br />
  2. 2. Benefits of good credit<br />Convenience and emergency protection for unexpected disasters<br />Allows budget flexibility<br />Can help lower your overall cost of living by making you eligible for best rates on insurance, interest, etc.<br />
  3. 3. Why you may be denied credit<br /><ul><li>Lack of Credit References
  4. 4. Insufficient Income
  5. 5. Too short a period of residency or employment
  6. 6. Derogatory Credit history
  7. 7. Too many Inquiries
  8. 8. Overextended with Credit
  9. 9. NSF Checks</li></li></ul><li>Types of credit<br />Secured = Credit backed up by savings or deposit equal to the amount of debt<br />Unsecured = Most credit, gas, and retail cards<br />Installment = Fixed amount, fixed term, fixed simple interest<br />Revolving = Variable amount, undetermined term, variable monthly payment<br />
  10. 10. 1-800-685-1111<br />www.equifax.com <br />Equifax<br />PO Box 740123<br />Atlanta, GA 30374-0123<br />1-800-888-4213<br />www.transunion.com<br />Transunion<br />PO Box 2000<br />Chester, PA 19022<br />1-888-397-3742<br />www.experian.com <br />Experian<br />475 Anton Blvd.<br />Costa Mesa, CA 92626<br />www.annualcreditreport.com<br />1-877-322-8228 <br />Annual Credit Report Request Service<br />PO Box 105283<br />Atlanta, GA 30348-5283<br />How to obtain credit reports & scores<br />
  11. 11. What is credit scoring?<br />A numerical score between 300-850<br />Determines if credit is granted, the amount offered, and interest rate<br />Bill payment history, number and types of accounts, late payments, collection actions, outstanding debt and age of accounts are all factors in assigning a credit score<br />
  12. 12. Determining credit scores<br />An individual’s data is compared to consumers with a similar profile and a score is assigned based on factors that predict who is most likely to repay a debt<br />
  13. 13. Credit scoring at a glance<br />
  14. 14. Credit score guidelines<br /><ul><li>Each time a consumer’s credit information is accessed an “Inquiry” is added onto the credit report
  15. 15. The inquiry shows who accessed the credit report and the date of that action
  16. 16. Inquiries stay in a credit file for 2 years</li></li></ul><li>Credit score guidelines (cont’d)<br /><ul><li>Negative account information will be reported for 7 years
  17. 17. Chapter 13 Bankruptcy filing stays 7 years from date of filing
  18. 18. Chapter 7 Bankruptcy stays on credit record for 10 years
  19. 19. Defaulted student loans, judgments on loans, and lawsuits can be listed longer</li></li></ul><li>Credit Card Debt Statistics<br /><ul><li>Payment patterns
  20. 20. Average debt per household
  21. 21. Average interest rate per household
  22. 22. Hidden costs and fees</li></li></ul><li>Building Personal Wealth<br />Build wealth by paying yourself first.<br />Your best financial investment is the one you make in yourself, because only you have your best interests at stake!<br />
  23. 23. Breaking the Cycle of Debt<br />Put yourself in control<br />Find out where you are today<br />Establish or update your Spending Plan<br />Track your successes<br />Reward yourself along the way<br />
  24. 24. Stop Paying for Time!<br /><ul><li>Minimum payments = maximum debt
  25. 25. Paying off debt vs. managing interest
  26. 26. How to save $23,425.78 in interest charges</li></li></ul><li>From Average Joe to Joe Millionaire<br /><ul><li>Pay down debt and save money to build wealth
  27. 27. Set short-, medium-, and long-range financial goals
  28. 28. Be focused and consistent
  29. 29. Remember: good credit and smart money management habits benefit you</li></li></ul><li>Money Wise Strategies<br /><ul><li>DO plan and set financial goals
  30. 30. DO pay yourself first
  31. 31. DO pay bills on time, every month
  32. 32. DO reconcile your bank and credit card statements monthly
  33. 33. DON’T make just the minimum payment on your credit cards
  34. 34. DON’T live above your means
  35. 35. DON’T abuse credit
  36. 36. DON’T forget that credit card terms and costs benefit the card issuer</li>

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