Consumer Credit Basics
Use credit wisely to enjoy
personal financial health.
Consumer Credit Basics
• The benefits and costs of using credit
• Basics concepts in consumer lending
• Credit scores
• Using credit wisely
Use Credit Wisely
• Build credit
• Big items; house, car, college
• Convenient & safe
• Emergencies
Use Credit Wisely
• Easy to live beyond your means
• Easy to get into credit trouble
• Hard to get loans for big items or
emergencies with bad credit
Credit 101
Installment or
Revolving
Secured or
Unsecured
Credit 101
Installment or The 3 C’s of Credit:
Revolving
1. Capacity
Secured or 2. Capital
Unsecured 3. Character
Credit 101
Installment or The 3 C’s of Credit:
Revolving
1. Capacity
Secured or 2. Capital
Unsecured 3. Character
Credit Score
Credit Score
New credit
10%
Types of credit
10% Payment History
35%
Length of history
15%
Amount Owed
30%
Credit Score
New credit
10%
Types of credit
10%
Payment History
35%
Length of history
15%
Amount Owed
30%
Credit Score
New credit
10%
Types of credit
10%
Payment History
35%
Length of history
15%
Amount Owed
30%
Use Credit Wisely
• Pay on time
• Pay in full or more than minimum
• Evaluate purchases
• Avoid fraud
Use Credit Wisely
• Pay on time
• Pay in full or more than minimum
• Evaluate purchases
• Avoid Fraud
•Over limit fees
•Convenience fees/interest
•Cash advance
Credit Help
• Communicate with lenders
• Talk to a financial counselor
• Work out a budget
• Prioritize debts
MCUL Financial Education
• MCUL Consumer Financial Education Library
• Financial Health course
• Lovemycreditunion.org
• CU Village Financial Resource Center