1. Entrance Ticket What are the two major lines of credit available to you? What options do you have to pay them back?

2. Agenda 1) Go Over HW 2) Understanding Credit Scores 3) Investigating Credit Scores 4) Exit Ticket

3. Go over HW According to the video, what options are available to you now in order to build your credit from scratch?

4. UNDERSTANDING CREDIT SCORES

5. What is a credit score? Number that “measures” your financial stability & ability to pay back loans Determines interest rates and credit limits that you qualify for Scores range from 300 – 850 Average American score is 650 – 740

6. Who determines your credit score? FICO: Fair Isaac Corporation FICO credit score: Collection of reports from the 3 major credit reporting companies 1.TransUnion 2.Experian 3.Equifax 90% of all companies that look at credit scores use your FICO score FICOFICO scorescore

7. Hard Inquiries vs Soft Inquiries When you apply for credit (typically a loan or credit card) and a third party looks up your score Can count against your score When you check your own score Does not affect your score

8. Five Contributing Factors to Your Credit Score

9. INVESTIGATING CREDIT SCORES

10. Credit Score Web Quest (1) How much does each company charge to get your report and score? Equifax = Transunion = Experian = Now google “What’s in my FICO Score” and for each factor, examine “How is credit score calculated from ____?” – Factor 1 (Payment History) Notes – Factor 2 (Amounts Owed) Notes – Factor 3 (Length of Credit History) Notes – Factor 4 (Types of Credit in Use) Notes – Factor 5 (New Credit) Notes

11. Credit Score Web Quest (2) Examine a sample credit report by googling “FICO Score Summary Sample” – What is the person’s credit score? Is it a good score or a bad score? How do you know? – Which elements of the person’s credit history are helping his credit? Which are hurting his credit? – What mortgage APR does he qualify for? – What is his risk to potential lenders? – How much credit has he borrowed for revolving credit? Installment credit?

12. Links for today’s activity http://www.myfico.com/crediteducation/wha tsinyourscore.aspx http://www.myfico.com/crediteducation/wha tsinyourscore.aspx http://www.myfico.com/products/ficoone/sa mple/creditreport/sample_summary.aspx? http://www.myfico.com/products/ficoone/sa mple/creditreport/sample_summary.aspx

13. Exit Ticket What factor matters the most when calculating your credit score? What can you do to improve this factor?