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By: Lane Cleeton
   Talk about what credit it is   Advantages and Disadvantages to having    credit and credit cards   Terminology   Tips
   Credit in simple terms is having use of    something before you pay for it.   Gives you flexibility, pay for expensiv...
   You need credit for many reasons    1.   To obtain best interest rates    2.   Employers review prior to hiring    3. ...
   Ability to obtain payment history which is    part of your credit score   Flexibility to rent a hotel room or an auto...
   Can be costly if you carry a balance and have    finance charges   Future income is for paying on balances   Make im...
   There are cost associated with credit and    credit cards. Knowing what the terms mean    will save you money in the l...
   Cash Advance Fee – fee for accessing cash    from a credit card   Late Fee – not pay the bill on time   Miscellaneou...
   Ask for a due date you can remember   Make on time payments (compensate for mail    time)   Read the disclosures   ...
   Owe    Pay-off time       total payments   $1,800 22years            $5,600   $2,700 12 years           $4,635   As...
   Convience, track spending, and earn rewards   Charge what you can afford   Pay on time   Have a variety of tools li...
   Avoid the following types of loans:    ◦ Payday loans – high interest of about 300-900%    ◦ Title loans – car title l...
   Trouble can happen with credit cards if    misused.   Do not use cards as extra cash   Signs to watch for    ◦   Onl...
   When establishing credit it can take up to 6-    12 months for the payment history to reflect    a pattern.    ◦ Pay b...
   When shopping for a credit card read and    understand the fine print.   Watch for low introductory rates   Do not w...
   To Prevent Fraud:    ◦ Do not use easily known PIN & Passwords    ◦ Shred Receipts    ◦ Use “trusted websites” online ...
   You should call your card holder immediately    to alert them of your loss.   Your liability would be zero (not respo...
   It is coded information which can be    confusing.   Credit Report includes:    ◦   Identifying information about you...
   FICO means Fair Isaac Corporation which is a    firm that developed a credit score system.   Range is 300-850   High...
   To maintain a good score:    ◦   Keep balances low on credit cards    ◦   Don’t open a lot of new cards    ◦   Longevi...
   The following can hurt your score:    ◦ Late bill payments – 30 days past due    ◦ Using all credit available to you (...
What affects your credit score                            Payment History                            Amounts Owed         ...
   Negative 7 years   Bankruptcies 10 years   Positive info for ever
   By law you get 3 free credit reports a year    meaning 1 from each bureau.   Visit www.annualcreditreport.com   The ...
   Mistakes can happen by:    ◦ Clerical error    ◦ Applied for credit under a different name      (Robert/Bob)    ◦ Gave...
   To dispute something on your credit:    ◦ Tell the credit bureau in writing identifying each      item, explain the di...
   If you have bad credit you can rebuild it by:    ◦     Paying the creditors and not ignoring them    ◦   Don’t use cre...
   http://www.myfico.com/
Major project presentation
Major project presentation
Major project presentation
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Major project presentation

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Major project presentation

  1. 1. By: Lane Cleeton
  2. 2.  Talk about what credit it is Advantages and Disadvantages to having credit and credit cards Terminology Tips
  3. 3.  Credit in simple terms is having use of something before you pay for it. Gives you flexibility, pay for expensive items over time, and helps you plan Several different types of credit ◦ Loans ◦ Mortgages ◦ Credit cards
  4. 4.  You need credit for many reasons 1. To obtain best interest rates 2. Employers review prior to hiring 3. Insurance premiums 4. Rentals 5. Reflects on how responsible you are
  5. 5.  Ability to obtain payment history which is part of your credit score Flexibility to rent a hotel room or an auto Access to funds in an emergency Convenience ◦ Carry less cash ◦ Interest free if paid in full when bill is due ◦ Accepted at most retailers ◦ Some credit cards have reward programs to redeem for gifts or cash
  6. 6.  Can be costly if you carry a balance and have finance charges Future income is for paying on balances Make impulse purchases easier May not sure item purchased, but still paying for it Rewards can make you over spend
  7. 7.  There are cost associated with credit and credit cards. Knowing what the terms mean will save you money in the long run. Annual Percentage Rate (APR) – annual rate of interest charged on an outstanding balance Annual Fee – fee charged yearly to have card Over limit Fee – charged when exceeding credit limit Balance transfer fee – assessed for transferring balance from one card to another
  8. 8.  Cash Advance Fee – fee for accessing cash from a credit card Late Fee – not pay the bill on time Miscellaneous fee – fees can include a replacement card, inactive account, and not carrying a balance
  9. 9.  Ask for a due date you can remember Make on time payments (compensate for mail time) Read the disclosures Don’t go over your credit limit Avoid minimum payment Universal default clause ◦ If you default on a bill, some credit card companies will raise your interest rate ◦ Avoid minimum payment
  10. 10.  Owe Pay-off time total payments $1,800 22years $5,600 $2,700 12 years $4,635 As you can see if you only make the minimum payment each period, you will pay more interest and it will take a longer time to pay it off. New regulations must show this information on your bill.
  11. 11.  Convience, track spending, and earn rewards Charge what you can afford Pay on time Have a variety of tools like loans and credit cards Apply for credit when need it Do not obtain high interest loans more expense (payday loans) Repay debts timely
  12. 12.  Avoid the following types of loans: ◦ Payday loans – high interest of about 300-900% ◦ Title loans – car title loans interest high, hard to repay due to expensive, and can lose your auto ◦ High-cost credit cards – cards that have high fees
  13. 13.  Trouble can happen with credit cards if misused. Do not use cards as extra cash Signs to watch for ◦ Only able to make min. payments ◦ Near or at your credit limit ◦ Using cash advances ◦ Creditors are calling ◦ Lying to family about spending habits ◦ Credit card balances exceed 20% of your income
  14. 14.  When establishing credit it can take up to 6- 12 months for the payment history to reflect a pattern. ◦ Pay bills on time ◦ Open a checking account – keep in good standings ◦ Obtain credit in your own name (small loan or credit card) and use it by charging on the card. ◦ Live with in your means ◦ Track your spending ◦ Save money for an emergency fund then you do not fall back on credit cards or loans
  15. 15.  When shopping for a credit card read and understand the fine print. Watch for low introductory rates Do not wait for offers – shop on your own Watch for the universal default rate (explained earlier) Obtain card with no annual fee
  16. 16.  To Prevent Fraud: ◦ Do not use easily known PIN & Passwords ◦ Shred Receipts ◦ Use “trusted websites” online ◦ Keep your card numbers & phone numbers in a file to be able to access them if cards are stolen ◦ Do not respond to unknown emails ◦ Look over your statements ◦ Review your credit report 3 times a year
  17. 17.  You should call your card holder immediately to alert them of your loss. Your liability would be zero (not responsible for fraudulent charges) Some card companies will have protection on the cards that notify if a transaction is not a common one of yours.
  18. 18.  It is coded information which can be confusing. Credit Report includes: ◦ Identifying information about you ◦ Employer information ◦ Payment history & creditors ◦ Bankruptcies, liens, judgments ◦ Inquiries on your credit
  19. 19.  FICO means Fair Isaac Corporation which is a firm that developed a credit score system. Range is 300-850 Higher the better Changes with activity on your report Ignores personal information and reflects credit practices (race, occupation, religion, and salary)
  20. 20.  To maintain a good score: ◦ Keep balances low on credit cards ◦ Don’t open a lot of new cards ◦ Longevity works in your favor ◦ Rate shop
  21. 21.  The following can hurt your score: ◦ Late bill payments – 30 days past due ◦ Using all credit available to you (using $400 of a $500 limit credit card) ◦ Opening to many new accounts in a short time ◦ Not working with a trusted financial Many people look at credit such as lenders, landlords, employers, insurance companies.
  22. 22. What affects your credit score Payment History Amounts Owed Length of Credit History New Credit Types of Credit Used
  23. 23.  Negative 7 years Bankruptcies 10 years Positive info for ever
  24. 24.  By law you get 3 free credit reports a year meaning 1 from each bureau. Visit www.annualcreditreport.com The 3 bureaus are Transunion, Experian, Equifax Your report is free and you would have to pay for your credit score
  25. 25.  Mistakes can happen by: ◦ Clerical error ◦ Applied for credit under a different name (Robert/Bob) ◦ Gave wrong social security number ◦ Payments inadvertently applied to the wrong account
  26. 26.  To dispute something on your credit: ◦ Tell the credit bureau in writing identifying each item, explain the dispute, and request your action ◦ Write to the creditor explaining the situation  Include copies of statements not originals  Dispute within 30 days  Take copies of sent items
  27. 27.  If you have bad credit you can rebuild it by: ◦ Paying the creditors and not ignoring them ◦ Don’t use credit cards or get new debt ◦ Ask for advise from your financial ◦ Review your report ◦ Set up automatic payments ◦ Consolidate debt ◦ Reduce credit card solicitations (www.optoutprescreen.com)
  28. 28.  http://www.myfico.com/

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