The document discusses understanding credit, including defining different types of credit like revolving and installment credit. It covers secured vs unsecured loans, interest expense including simple, accrued and compound interest. The five C's of credit are discussed as well as credit scores and how to obtain a credit report. Tips are provided on how to improve a credit score such as paying bills on time and paying down credit card balances. When to use credit for things like credit cards, vehicles and housing is covered. The document concludes with how to protect credit by obtaining credit reports, disputing mistakes, and protecting personal information.

1. Understanding Credit
West Virginia Women Work, Inc.

2. Understanding Credit
What is Credit?
• Revolving Credit
• Installment Credit
• Open Credit

3. Understanding Credit
Secured vs. Unsecured Loans
• What is collateral?

4. Understanding Credit
What is Interest Expense?
• Simple (Regular) Interest
• Accrued Interest
• Compounding Interest
• Fixed vs. Variable Rate Interest

5. Understanding Credit
Five C’s of Credit
1. Character
2. Capacity
3. Capital
4. Collateral
5. Conditions

6. Understanding Credit
What is a Credit Score?
• FICO Credit Score
• Range: 300 to 850
• How is it determined?
• How do I get my credit report?

7. Understanding Credit
Assignment 1: Obtain Free Credit Report
AnnualCreditReport.com

8. Understanding Credit
How do I improve my score?
• Pay bills on time
• Get current & stay current
• Pay down Credit Card Balances
• Fix any mistakes found on credit report
• Keep old accounts open & in good standing
• Don’t open new accounts unless necessary

9. Understanding Credit
When to Use Credit?
• Credit Cards
• Purchasing a vehicle
• Renting vs. Buying a house

10. Understanding Credit
How to protect your credit:
• Obtain a copy of your credit report
• Dispute any mistakes
• Protect Personal and Account Information
• Don’t carry credit cards you don’t need
• Keep a list of card numbers

11. Understanding Credit
How to protect your credit (cont):
• Never provide personal or credit card info unless
you initiate
• Review all account statements
• Shred (or burn) all Preapproved offers, receipts,
etc.
• Don’t put bills in mailbox