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Why are we talking about credit?

Why are we talking about credit?. When is it OK to borrow money?. When is borrowing money not a good idea?. What this means for you?. Credit Options. Revolving credit (example: credit card) Borrow for multiple purchases without going over credit limit Repay what is owed each month

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Why are we talking about credit?

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  1. Why are we talking about credit? When is it OKto borrow money? When is borrowing moneynot a good idea? What this means for you? (C)2012 National Endowment for Financial Education | Lesson 2-1 Using Credit
  2. Credit Options Revolving credit (example: credit card) Borrow for multiple purchases without going over credit limit Repay what is owed each month Installment credit (example: car loan) Borrow a specific amount of money to buy something now Make regular payment to repay over time by a set date Cash loans Borrow a specific amount of cash to repay later by a set date Service credit (example: cellphone, electricity) Promise to pay for services used each month (C)2012 National Endowment for Financial Education | Lesson 2-1 Using Credit
  3. CREDIT RATING: Applying for Credit Cam N. Tran 515 Canyon Circle, SLO, CA 805-654-9851 June 16, 1993; SS: 111-22-3333 Ms. Tran is the Campus Ambassador of Cal Poly for CalCPA Ms. Tran started working at CalCPA five years ago today and currently earns $5,100 per month. Cam has a savings account (#123-45-6789) at a Wells Fargo Pay $975 per month for mortgage Full, legal name Current address and phone number Date of birth and Social Security number Current employer Monthly income Bank name and account number Monthly rent or mortgage payment (C)2012 National Endowment for Financial Education | Lesson 2-3 Credit Rating
  4. CREDITKARMA.com (C)2012 National Endowment for Financial Education | Lesson 2-1 Using Credit
  5. Credit Reporting A history of how you have used credit: Where you live and work Credit account amounts (balances and limits) Payment history (on time or late) Recent inquiries from creditors Any collection or legal action to collect debt (C)2012 National Endowment for Financial Education | Lesson 2-3 Credit Rating
  6. Starting Out (C)2012 National Endowment for Financial Education | Lesson 2-3 Credit Rating
  7. Know the Limit: The 20-10 Rule *This rule does not included mortgage-related debt. (C)2012 National Endowment for Financial Education | Lesson 2-4 Rights and Responsibilities
  8. Which will help your rating?Do the following actions help your credit score? Pay your bills on time. Yes, paying on time is the single best way to get a good credit score. Open several accounts in a short period of time. No, opening several accounts in a short time frame hurts your score, especially when starting out. This makes you look desperate to borrow. Own a credit card you don’t ever use. No, creditors want to see how well you use credit. If there’s no activity for a long time, the account may be considered inactive. (C)2012 National Endowment for Financial Education | Lesson 2-4 Rights and Responsibilities
  9. Do the following actions help your credit score? Frequently move credit card balances to new cards with better interest rates. No, card hopping decreases the average age of your credit accounts, and lenders like to see long-term relationships. Get a credit card when you already have a carand student loan. Yes, adding a credit card when you only have loans can help because lenders prefer to see a mix of credit types. (C)2012 National Endowment for Financial Education | Lesson 2-4 Rights and Responsibilities
  10. Win Loans and Influence InterestDo the following actions help your credit score? Close a credit card that you made a lot of late payments on. No, closing an account with negative items won’t help. The account will still remain on your credit report for upto 10 years, whether inactive or closed. Use a debit card responsibly. No, debit card usage doesn’t show up in a credit report because these transactions are withdrawals from your own bank account rather than borrowing from someone else. (C)2012 National Endowment for Financial Education | Lesson 2-4 Rights and Responsibilities
  11. Lets look at the stats… 10 percent of U.S. youth had someone else using their Social Security Number Identity fraud is growing for minors. Teens 15 – 18 years old are the main target. Fraud may go undiscovered for years: Businesses only see clean credit history when someone applies. Credit reports are not available for minors to check for any activity. Fraud often detected only when the victim applies for a loan or credit card in his or her own name. Source: Richard Power, Child Identity Theft, Carnegie Mellon CyLab Report (C)2012 National Endowment for Financial Education | Lesson 2-5 Identity Fraud
  12. What’s in your wallet/backpack?Give yourself a point for each of these items listed below. __ Credit card (The actual number of cards) __ ID card with photo (school, employment) __ $5 bill __ Change (coins) totaling $2 or more __ Original Social Security card __ Picture of a close relative __ Computer password (The actual number of passwords) __ Bank/Credit Union ATM PIN number __ Library card __ Paycheck stub __ Bank or credit union deposit slip __ Any type of money-saving coupon __ Car keys __ Flash drive for computer __ Cell phone __ Driver’s license __ Membership card (C)2012 National Endowment for Financial Education | Lesson 2-5 Identity Fraud
  13. 7 Tips to Thwart Thieves Keep sensitive information close to the vest. Lighten up your wallet. Never leave blanks on a charge slip. Stick to secure web pages. Shred ruthlessly. Be computer safe by using firewalls, anti-spyware and anti-virus software. Guard your Smartphone too! (C)2012 National Endowment for Financial Education | Lesson 2-5 Identity Fraud
  14. What is a Roth IRA? BONDS STOCKS ROTH IRA MUTUAL FUNDS (C)2012 National Endowment for Financial Education | Lesson 2-1 Using Credit
  15. Should I get a Roth IRA? Withdrawing Money Debt Interest vs. Money gained from IRA Employer Contributions (C)2012 National Endowment for Financial Education | Lesson 2-1 Using Credit
  16. Where to get a Roth IRA? Your current bank T Rowe Price Other Institutions (C)2012 National Endowment for Financial Education | Lesson 2-1 Using Credit
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