1. Credit Scores
What is a FICO Score??

2. Why do you need a Credit Score?
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Auto insurance is determined by your credit score.

3. Why do you need a Credit Score?
1 – Used to qualify for an auto loan and determine the premiums you will pay

4. Why do you need a Credit Score?
2 – Used to qualify for a home/mortgage loan, determine the amount of a loan you can get, and how much is the interest rate you will pay

5. Why do you need a Credit Score?
3 – Used to get lower interest rates on loans, credit cards, and insurance

6. Why do you need a Credit Score?
4 – Employers use your credit score when they look at your job application or for job promotions

7. Why do you need a Credit Score?
5 – Landlords use your score to determine if you can rent an apartment or house

8. What is a “good” credit score
Numbers range from 300 – 850
Poor rating: 300 – 600
Fair rating 600 – 700
Better rating: 700 – 750
Best rating 750 – 850
(some scores reach 900)

9. How is your score determined?
Do you pay your bills on time? And, do you pay them in full.

10. How is your score determined?
How long is your credit history?
It takes time to develop your credit history

11. How is your score determined?
What is the ratio of credit to debt?
You want a lot of available credit but only use about 10 – 20% .
Example: Credit card maximum limit = $10,000 but you never charge more than $1,000 each month

12. How is your score determined?
What is the mixture of your credit?
Examples: water bill, heating bill, cell phone bill, one or two credit cards, one or two department store cards, auto loan, insurance bill, medical bills, mortgage or rent payments…

13. How is your score determined?
Are you in the habit of getting more and more new credit cards?
You really don’t want every department store credit card out there…

14. How can you ruin your credit rating?
Charge too much on your credit cards
Only pay the minimum on your credit cards
Don’t pay your bills on time
Apply for new credit cards frequently

15. How can you improve poor credit?
Pay all of your bills on time
Only use one credit card
If you have others cut them up and throw away – but don’t cancel the card!!
Only use about 10% of your available credit
Pay your credit card in full each month