1. Please… Please place your notes from yesterday in the basket Log into Moodle and complete today’s Bell Ringer

2. Credit Abuse Resistance Education Program 2 FICO Credit Scores 1.A score determined by your past use of credit, as recorded by the three credit- reporting agencies 2.A 3-digit number between 300 & 850 You have three FICO scores, one from each credit-reporting agency. Equifax – TransUnion – Experian You have three FICO scores, one from each credit-reporting agency. Equifax – TransUnion – Experian

3. Credit Abuse Resistance Education Program3 FICO Credit Scores (continued) 3.Used by lenders to determine your interest rate 4.Lower FICO score = higher interest 5.Scores >800 = getting the best interest Average interest rate for a $300,000 30-year, fixed-rate mortgage on February 8, 2011, based on average nationwide credit scores. Source: http://www.myfico.com/LoanCenter/Mortgage/ 02/08/2011http://www.myfico.com/LoanCenter/Mortgage/

4. Credit Abuse Resistance Education Program4 FICO Credit Scores (continued) The cost difference between the highest and lowest credit scores for a $300,000 loan: Average interest rate for a $300,000 30-year, fixed-rate mortgage on February 8, 2011, based on average nationwide credit scores. Source: http://www.myfico.com/LoanCenter/Mortgage/ 02/08/2011http://www.myfico.com/LoanCenter/Mortgage/ $299 per month $3,588 per year $107,640 for the entire 30-year loan

5. Credit Abuse Resistance Education Program 5 FICO Credit Scores (continued) 6. Also used by lenders to decide: – Whether to approve your credit application – Whether to increase your credit limit – How to treat you if you make a late payment

6. Credit Abuse Resistance Education Program6 FICO Credit Scores (continued) 3.Used by landlords to see if you are financially responsible 4.Used by employers to determine good candidates 5.Used by cell phone carriers to determine whether they should give you a contract 6.Used by insurance companies to give you discounts 7.It could show up in many more venues!

7. Credit Abuse Resistance Education Program7 Please… Open up a blank Word document and finish this list by finding information online: I can get a good FICO score by doing these things: 1. 2. 3. 4. 5.

8. High FICO Score

9. How is this score determined? Payment history: 35% of your credit score is based on how you handle your payments. Amount of credit used: Another 30% of your credit score has to do with how much of your available credit is being used. Age of credit: Next, the age of your credit accounts for 15% of your credit score.

10. How is this score determined? Types of accounts: All of the accounts you have opened are included in your credit report (10% of your score). New credit and inquiries: The final 10% of your credit score is based on the credit inquiries made on your behalf. – Your score can be lowered if you apply for too many credit accounts at once.

11. Credit Abuse Resistance Education Program 11 Tips: Establishing Credit 1.Establish good credit by paying bills in full and on time each month. – All your bills! 2. Take out a small loan and repay it in a timely manner to establish a good credit record – Use a parent as co-signer 3. If you have a credit card, charge a small amount each month and pay it off in full 4. Don’t open too many credit cards – use 1 or 2 wisely 5. Check your credit score at least once a year

12. Credit Abuse Resistance Education Program 12 Tips: Determine if Credit is for You Before you make a purchase using credit, determine: – How much the purchase will really cost you Use credit card calculators online: http://www.bankrate.com http://www.bankrate.com – Whether you can actually afford the purchase – If it is better to wait and pay in cash

13. Advertisement Project With a partner you will create a poster as part of the “Wise Credit Campaign” – Use Word, Publisher, Photoshop, etc Must include: 1.A slogan that you come up with that encompasses what we went over the last 2 days 2.The positives and negatives of credit 3.Advice on how to use credit wisely 4.Things to be careful of when using credit 5.What a credit score is and how to get a good one