Credit report Lisa Patterson

CREDIT REPORT A credit score = a number assigned by credit reporting agencies based on information from your credit report. Higher scores = better credit Good credit score = shows high probability of repaying loans on time Allows for better interest rates on loans (i.e. mortgages) Get a job = employers now review credit reports as part of employment decisions Rent an apartment =landlords review credit reports 3 major companies Equifax, Experian, TransUnion which determine your credit scores

CREDIT REPORT A credit report is a financial picture of who you are and it tells: Whether you have made payments responsibly on time. The amount of debt you have If there is false or negative information about you in your public records

CREDIT REPORT

Credit Report Breakdown of credit score Payment History Amount of Debt Length of Credit History and Types of Credit New Credit Utilization Available Credit

Credit scores range from 501 to 990 CREDIT REPORT Credit scores range from 501 to 990 A stands for someone who most likely would repay their loans F a high-risk borrower is someone who most likely will be unable to repay their loans on time. Here are the score ranges: 901 - 990 801 - 900 701 - 800 601 - 700 501 - 600 (very low-risk) (low-risk) (medium-risk) (high-risk) (very high-risk) = A = B = C = D = F

CREDIT REPORT You can purchase your credit score from the three credit reporting agencies: Equifax -1-800-685-111 or www.equifax.com Experian- 1-888-Experian (397-3742) or www.experian.com TransUnion- 1-800-916-8800 or www.transunion.com A free Credit Report online at www.annualcredit report.com to request a form. Or Toll free-1-877-322-8228

Borrowing Basics Brenda Lopez

Borrowing At some point in our lives, we all come upon a situation where we must borrow money!   There are many different options and ways to borrow money, we must, however, make wise choices and be aware of the cost of each one. Which type of borrowing benefits our situation the most?

What Is Credit? "Good Credit" Credit is the ability to borrow money. When you borrow money on credit, you get a loan. "Good Credit" -Being a responsible borrower who makes loan payment on time to repay the money you owe. -Having a good credit comes in handy when you try to borrow money at a later time.

Why Is Credit Important? Credit is important because: a. It can be useful in times of emergencies b. It's more convenient than carrying large amounts of cash c. Allows you make large purchases (e.g. car, house) and pay it over time d. Can affect your ability to obtain employment, housing, and insurance based on how you manage it

Collateral Collateral is security you proved the lender.   Collateral is security you proved the lender. Collateral ---> Guarantee ---> Cosigning

Secure loan does where the borrower offers collateral for the loan.   vs. Unsecured loan is not backed by collateral

Asset is something of value that you own (e. g Asset is something of value that you own (e.g. car, savings, house, investments, etc. )  

Pay yourself first Kunjae Shin

Contants Debit? Credit? Saving - SMART goal Interest Investing - Stocks - Bonds - Mutual Funds

Debit Card Pro Cons Fund taken out of account immediately like real money Can only use $ in the account quick reaction of the checking account Cons Fund taken out of account immediately In case of dispute, merchant has your money No same level of consumer protection like credit card

Credit Card Pro Don’t have to pay while in dispute Online purchases No access to checking account No interest cost (when you pay off monthly) Cons Monthly pay bill Interest in calculated on the balance (10- 20%) Need to apply and approve Merchants indirectly pass on fees to consumers

Why saving? To approach goal Improve your standard of living Learn to manage money For emergencies

Saving tip Regular basis Restaurant, coffee Need? Direct deposit or automatic transfer to saving Pay your bills on time Save any cash gift you receive Avoid debt Save change at the end of the day Save tax refund Join a retirement plan

Rule of 72 (lesly)

Saving options Individual development account (specific purpose) - IDA Electronic transfer account (federal payment -> direct deposit) – ETA College savings(529 plan)

Interest? An amount of money financial institutions pay you for keeping money on deposit with them Percentage Calculated based on the money in your account Compound interest (lesly)

Why investment? For long-term goals Your money grow fast than saving Old age guarantee (no pensions)

Invest Option Stocks – well ownership share Bonds – borrow from individual Mutual Funds –

Power of compound and interest Lesly Sandoval

The Power of Compound Interest When you invest, you earn interest on your money. And then that interest earns interest. That’s called compound interest, and it’s how your account grows over time Interest can be compounded Daily Monthly Annually The Rule of 72 teaches you how that works

THE RULE OF 72 Sometimes called the Banker’s Rule. It is used to estimate the number of years it will take your money to double. HOW IT WORKS: Divide the interest rate you are currently receiving on your savings account. The result will give you an approximation of how long it will take to double your initial savings amount

FOR EXAMPLE: $2000 at an interest rate of 4 percent. Divide 4 into 72 = 18. In 18 years you will have $4,000. Every 18 years your $$$ will double. Now, $2,000 at 9 % interest 72 / 9 = Every 8 years your $2,000 will double Year 1 $2,000 Year 8 $4,000 Year 16 $8,000 Year 24 $16,000 Year 32 $32,000 If you’re grandmother gave you $2,000 as a high school graduation gift and you put it into a smart savings/investment vehicle, when you are 52 you will have $32,000!!! You can also use this rule to estimate how much interest you would need to earn to double your money within a number of years

THE COST OF WAITING 100 people at age 65 54 dependent 36 working