1. Chapter 17 Establishing Good Credit

2. What are the sources of credit?
Where are the different places you can go to get credit?
3. Finance Companies (borrow from bank; high APR)
4. Pawnbrokers (Personal pieces given as collateral)
5. Private Lenders (parents, friends, relatives)
1. Retail stores (American Eagle, Express)
2.Banks/Credit Unions (Based on collateral or capital)

3. Credit File Common Creditor Questions
~ Did you pay bills on time? Payment amt?
~ Did you pay debts according to agreement?
~ How much credit did you receive?
Your credit history is the complete record of your borrowing and repayment performance; filed with credit bureau.

4. The Credit Bureau Gathers, stores, and sells credit information
Usually sell information to subscribers
1,200 across the nation
Store all information under social security

5. 3 Major U.S Credit Bureaus
~Experian- Allen, TX
~Equifax- Atlanta, GA
~Trans Union- Springfield, PA

6. Creditworthiness- the 5 C’s
1. Character- will you pay your debt?
2.Capacity- can your income repay the debt?
3. Capital- are they protected if you don’t pay? (Net Worth)
4.Conditions- how secure are you?
5. Collateral- what assets can pay debt?

7. What is Done With Your Information?
Your information is sold to subscribers
Names, addresses, balances, etc.
Gathered as public record to assess you
Used by banks for loans
Employers
Landlords
Insurance Companies

8. How Do You Get Started?
What do you need?

9. Ways of Getting Started
Open a savings account
Make Deposit every month.
Choose one that offer other services.
Open a Checking Account
Convenient paying method
Good record keeping
DON’T BOUNCE CHECKS

10. Ways of Getting Started, cont.
Open Store Credit
Good card because it has co-signers & low balance
Get a Small Loan
Prove that you can pay lender back
Apply for a Credit Card