1. Financial Wellness Curriculum Good Credit: Get It More information available at YouCanDealWithIt.com

2. Credit Objectives  What is credit?  Needs vs. Wants  Good debt vs. Bad debt  The dangers of credit cards  Understanding your credit report and credit score  Eliminating credit card debt  Debt Repayment Calculator  Identity theft  Free credit report

3. What is Credit? Key terms:  Annual Percentage Rate (APR)  Fixed  Variable  Introductory rate  Default rate  Grace period  Minimum monthly payment  Annual fees  Finance charge

4. Needs vs. Wants Needs are the basic things that are required for your safety and health, including food to keep you alive, clothing to keep you warm, and a shelter to protect you. Wants, on the other hand, are items you desire but are not critical to life. NeedsWants FoodGroceries, eating in the cafeteria Eating Out ClothesBasicsDesigner TransportationUsed car, bus, subwayNew sports car ShelterDorm roomApartment, House

5. Good Debt vs. Bad Debt Sometimes it makes sense to borrow -- but a lot of times it doesn't.  Good Debt – Items that will grow in value such as a home, education or investments.  Bad Debt - Includes debt you’ve taken on for things you don’t need and can’t afford by using credit cards or store charge cards.

6. The Dangers of Credit Cards Are you only making the minimum monthly payment? If so you will end up paying almost double for your purchase. Amount Borrowed Interest Rate Repayment TermInterest PaidTrue Cost $1,00018%153 months / 12 years$1,115.41$2,115.41 $2,50018%244 months / 20 years$3,365.51$5,865.51 $5,00018%313 months / 26 years$7,115.42$12,115.42

7. 1. Credit cards won’t hurt my credit report if I don’t carry a balance. 2. I don’t have to pay any interest during my grace period. 3. A credit card company can’t increase the interest rate if my payments to them are always on time. 4. Your credit report and score is something you don’t need to worry about until you buy a house or car. 5. Credit and debit cards are the same. 6. Good credit can help you get a better interest rate on loans, car insurance and even a job. Test Your Credit Card IQ

8. Understanding your Credit Report POTENTIALLY NEGATIVE ITEMS Credit Items: 123 Visa Status: Past due 60 days Date Opened Type Credit Limit/Original Amount 10/2/2005Revolving $1,000.00 Reported Since Terms High Balance 2/20/2006NA $852.27 Date of Status Monthly Payment Recent balance 5/1/2006$0.00$745.39 Last Reported ResponsibilityRecent payment 7/1/2006Individual $0.00 ABC Bank Status: Past due 30 days Date Opened Type Credit Limit/Original Amount 11/20/2003Installment $9,350.00 Reported Since Terms High Balance 2/20/200660 months $9,350.00 Date of Status Monthly Payment Recent balance 5/1/2006$225.00$6,234.08 Last Reported ResponsibilityRecent payment 7/1/2006Individual $225.00

9. Understanding your Credit Report ACCOUNTS IN GOOD STANDING ADS Retail Status: open/never late Date Opened Type Credit Limit/Original Amount 10/1/2003Revolving NA Reported Since Terms High Balance 10/1/2003NAUnknown Date of Status Monthly Payment Recent balance 10/1/2003$0.00Unknown Last Reported ResponsibilityRecent payment 11/1/2003Individual $100.00 DJL Dept Store Status: closed/never late Date Opened Type Credit Limit/Original Amount 9/1/2002Revolving $500.00 Reported Since Terms High Balance 3/1/2003NA$85.00 Date of Status Monthly Payment Recent balance 5/1/2003$15.00$0.00 as of 5/1/2003 Last Reported ResponsibilityRecent payment 5/1/2003Individual $35.00

10. Understanding your Credit Report REQUESTS FOR YOUR CREDIT HISTORY Requests viewed by others TLC Reality Co Date of Request 900 Front St 5/14/2006 Any town, PA 1111 AAA Department Store P O Box 700 Date of Request Some town, PA 122223/26/2006 Requests Viewed by you One Bank 999 Walnut StDate of Request Some town, PA 1222238802 National Bank 123 River Rd Date of Request Main town, PA 1133311/3/2005

11. Understanding your Credit Report PERSONAL INFORMATION NamesEmployers: John J SmithABC Architects John Smith J J Smith Address Jon Smith123 Green St Some town, PA 11111 Date of Birth 7/4/1976104 Water St Anywhere, NJ 33333 Spouse's Name Jane

12. Fixing Errors on Your Credit Report 1. Write to the consumer reporting company and explain what information is inaccurate. 2. Credit bureaus will review the documentation and if further investigation is required, they will provide a copy to the source that furnished the disputed information to them. 3. The source will then review the information and report back to the credit reporting company.

13. Understanding Your Credit Score

14. The Effects of Your Credit Score Eligibility for future credit Insurance Employment Housing Interest rates on future loans Credit Score500-589590-624625-659660-689690-719720-850 36-month new auto loan 18.59716.20612.2259.4987.3866.674 48-month new auto loan 18.59816.20612.2269.5007.3906.678 300850

15. Improving Your Credit Score Make your payments on time. Establish a long term account with a reputable credit card company. Don’t take on more debt than you can handle. Don’t get caught up in credit repair scams.

16. Eliminate Credit Card Debt 1. Track your spending 2. Stop using your credit cards 3. Stop new credit offers Call: 1-888-5-optout 4. Consolidate your debt 5. Use automatic bill pay 6. Create a budget Budget a specific amount to pay on your credit cards until ALL are paid in full.

17. Eliminate Credit Card Debt Monthly PaymentTermInterest PaidTrue Cost Minimum payment$35.00179 months$3,793.07$6,293.07 Budgeted amount$60.0059 months$1,053.42$3,553.42 What you save by sending the budgeted amount 120 months$2,739.65 Account balance: $2,500 Interest rate: 15% Account balance: $5,000 Interest Rate: 15% Monthly PaymentTermInterest PaidTrue Cost Minimum payment$65.00262 months$12,047.77$17,047.77 Budgeted amount$95.0086 months$3,202.88$8,202.88 What you save by sending the budgeted amount 176 months$8,844.89

18. Debt Repayment Calculator

19. Identity Theft  Don’t give out your Social Security Number unless you are absolutely certain of who you are giving it to, why they need it and what they will do with it.  Never give out personal information on the phone to someone who initiated the call. If you are uncertain hang up and call the company’s headquarters.  Examine your financial statements to ensure all charges made are yours.  Review and monitor your credit reports regularly.  Shred and destroy unneeded documents that contain personal and financial information.

20. Identity Theft  Immediately report lost or stolen credit cards.  Do not carry your social security card or birth certificate.  Keep your ATM and Debit Card receipts, do not leave these behind.  Bring in your mail daily.  Keep important documents in a safe and secure place.

21. Reporting Identity Theft 1. Contact the fraud departments of any one of the three consumer reporting companies to place a fraud alert on your credit report. 2. Close the accounts that you know or believe have been tampered with or opened fraudulently. 3. File a report with your local police and in the community where the identity theft took place. 4. File your complaint with the FTC.

22. Free Credit Reports Request your free credit report one of these two ways: Go to: annualcreditreport.com Call 1-877-322-8228 This is the only authorized source for consumers to access their annual credit report online for free. Be sure to order from the agency listed above. If you go directly to the credit reporting agencies, you may be charged.

23. Credit Objectives Recap What is credit? Needs vs. Wants Good debt vs. Bad debt The dangers of credit cards Understanding your credit report and credit score Eliminating credit card debt Debt Repayment Calculator Identity theft Free credit report

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