1. Credit Ratings: How to Determine Your Score Section 6-6

2. Credit Ratings Is an indication of a person’s ability to secure goods, services, and money in return for the promise to pay.

3. Three C’s Capacity – Do you have the ability to repay the loan Character – Are you responsible Collateral – Is the bank protected from loss of income. Other assets (car, home, savings account) can be used as security for the loan

4. Credit Scoring Age – Older are a better credit risk. People in their 30’s often face problems (Divorce or financial strain) Housing – Longer you have lived in the same location. Better to own then rent. Car – Better to own a newer car Job – Length of employment, type of job, income, and current debt

5. Credit Scoring Better to have both a checking and saving account Better to have one or more credit cards If you borrowed from a high interest finance company or you have been turned down once in the last six months can hurt your credit score

6. Ways to start smart Open a charge account at a retail store Establish Checking and Savings accounts Get a small loan – You may need a cosigner (Another person who will pick up your payments if you default) Join a Credit Union Be a responsible employee

7. Homework I would like you to go to: http://www.credit.com/calculators/score/ and estimate your credit score Print off a copy of your score and attach it to your homework