High School Financial Planning Program Lesson 2-3: Credit Rating

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High School Financial Planning Program Lesson 2-3: Credit Rating

Workshop Goal Learning Objectives

Presentation transcript:

High School Financial Planning Program Lesson 2-3: Credit Rating Today you will . . . Start down the path To build a reputation as a responsible borrower. 1 ©2014 National Endowment for Financial Education | www.hsfpp.org

High School Financial Planning Program Lesson 2-3: Credit Rating Can I Borrow? What were you trying to borrow, and were you successful in negotiating a deal to borrow the item? Why or why not? What were the conditions (if any) for you to follow so you could borrow or use the item? When you were asked to loan the item, what influenced your decision to let the person borrow the item? 2 ©2014 National Endowment for Financial Education | www.hsfpp.org

High School Financial Planning Program Lesson 2-3: Credit Rating Preview Today we will answer these questions: How do I get a loan or credit card? Will I automatically get approved for a loan? How much can I borrow? Use what you learn today to establish a borrowing code of conduct. 3 ©2014 National Endowment for Financial Education | www.hsfpp.org

High School Financial Planning Program Lesson 2-3: Credit Rating Applying for Credit 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 Christina L. Anderson [use your own address, phone number] May 29, 1963, (SS # provided) Ms. Anderson is a physical therapist at Sargant Care Clinic, 400 Medical Way, [your town] Ms. Anderson started working at Sargant five years ago today and currently earns $5,100 per month. The Andersons have a savings account (#123-45-6789) at a bank near you Pay $975 per month for mortgage 4 ©2014 National Endowment for Financial Education | www.hsfpp.org

High School Financial Planning Program Lesson 2-3: Credit Rating You Make the Call Approve or Deny a credit application? 5 ©2014 National Endowment for Financial Education | www.hsfpp.org

High School Financial Planning Program Lesson 2-3: Credit Rating 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 6 ©2014 National Endowment for Financial Education | www.hsfpp.org

High School Financial Planning Program Lesson 2-3: Credit Rating Who’s Watching? Credit-Reporting Agencies Equifax Experian TransUnion Credit Card Providers, Lenders, Banks, Landlords, Employers, Insurance Companies 7 ©2014 National Endowment for Financial Education | www.hsfpp.org

High School Financial Planning Program Lesson 2-3: Credit Rating Starting Out Ask someone to cosign on the agreement. Show evidence of steady employment. Use a checking account responsibly; have money in the bank. Establish a relationship with a bank or credit union. 8 ©2014 National Endowment for Financial Education | www.hsfpp.org

High School Financial Planning Program Lesson 2-3: Credit Rating Challenge Assignment Devise a plan for action you can take now to practice sensible borrowing habits and to build a good reputation as a borrower. 9 ©2014 National Endowment for Financial Education | www.hsfpp.org