1. Do Now 12/7/16 On a half sheet of paper answer the following:
Explain the consumer benefits and what these consumer laws affect
Truth in Lending Act
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Debt Collection Practices Act
TAKE OUT YOUR NOTES FROM THE PAST FEW DAYS

2. Identify major criteria in a person’s credit rating
Lesson 2 CREDIT SCORES
GOALS
List the 3 C’s of credit
Identify major criteria in a person’s credit rating

3. Would you lend your money to just anyone?
3 C’s of Credit
Collateral
An item of value that backs the loan in case the borrower defaults on the loan. The bank uses the collateral to recover the financial loss of an uncollected loan. If car is worth $10k, why would I loan you $15k?
Capacity
The debtor’s ability to pay back a loan. Does the debtor have a job? How long have you been working there?
Character
Refers to the debtor’s honesty and willingness to pay back a loan. Creditor’s take into account the reputation of paying back loans on time. i.e- Credit Score

4. Think, Pair, Share
Turn to your neighbor and explain to them what the 3 C’s of Credit are and why they are important

5. ANALYZING CREDIT Consumer reporting agencies
A consumer reporting agency (CRA) is a company that compiles and keeps records on consumer payment habits and sells these reports to banks and other companies to use for evaluation creditworthiness.
Consumer reporting agencies are sometimes called credit bureaus.
The three largest CRAs
Equifax
Experian
TransUnion

6. CREDIT REPORTS INCLUDE
Personal data
Name, social security #, address, employment history
Accounts history
Delinquent accounts
Collections from phone bill, unpaid hospital bills, landlords, etc
Public records
Bankruptcies, judgments, liens, divorces, criminal records
Inquiries
Record of who has requested your credit report recently. Too many inquiries can hurt your credit score

7. Analyzing Credit Credit-scoring systems
A credit-scoring system can provide an efficient and unbiased method of evaluating credit.
These scores place a numerical value on the performance or status of an applicant in various categories.
FICO is the standard credit score in the United States
The FICO score is a three-digit number
*** score ranges from 300 – 850 ***

8. How is your Credit Score calculated?

9. How to Boost your Credit Score
Pay your bills on time. Late payments or defaults can really hurt your score
Keep balances low on credit cards. High debt levels can hurt your score
Apply for and open new credit accounts only when you need them. Pay down current credit products first
Check your credit report regularly for accuracy
If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score

10. Any Questions? Lets Review: What is included in your credit score?
What are the 3 C’s of Credit
Why do you think creditors look at a potential debtor’s credit score?

11. Exit Slip List 3 things that is included on your credit report
List 2 actions that can negatively affect your credit score
What are the 3 C’s of Credit
Why do you think that creditors/lenders take into consideration a person’s credit score?