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Published byCornelius Laurence White Modified over 9 years ago
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How to maintain good credit?
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Obtaining goods and services with a promise to pay for them from future income to buy today and pay tomorrow involves two parties, a lender and a borrower
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Sales Credit: to purchase goods and services from retailers, revolving credit Cash Credit : money granted to use for a variety of purposes: Unsecured loans(no collateral) Secured Loans (Collateral) and Cash Credit (loans with Installments payment)
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Is a report card reflecting how well you use credit Three sources; Equifax, Experian and TransUnion Fair Credit Reporting Act; 1 free credit report a year
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3’s C--- Character: reputation of honesty Capacity: employment history Capital: financial worth Creditor lend to people who can pay back!!
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Preferred Lenders: Most reliable lender; banks, credit unions and private loans Non-preferred lenders: take advantage of people with poor credit; payday lenders, auto loan lenders and loan sharks etc….
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Annual Fees APR (Annual Percentage Rate) Interest Minimum payment Grace period Charges Credit limit Features and services
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Read the fine print Is it wise or unwise to use credit Provide information about income, employment, credit history etc.. They will run your credit Truth Lending Act; rescission (Companies) can cancel within three days.
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Understand your need to borrow Identify and use the right type to credit Know how you will pay back Only use the amount of credit you can afford Keep records Consult creditors immediately if you have problems Resolve billing errors
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No saving Stressed and Worrying over money problems Reached credit limits Skip payments Use cash advance to pay bill Use credit for day-to day items Open credit so you can reach credit limits Agencies are trying to collect from you!!!
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Deal with the problem Stop using Credit Get help Develop spending plan Contact Creditors immediately Chapter 7– Must sell personal belonging to pay back Chapter 13– Can retain belongings but must have a repayment plan
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