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 Revolving Secured or Unsecured
The 3 C’s of Credit: 1. Capacity 2. Capital 3. Character
Credit 101
Installment or Revolving Secured or Unsecured
The 3 C’s of Credit: 1. Capacity 2. Capital 3. Character
Credit Score
Credit Score
New credit 10% Types of credit 10% Length of history 15% Payment History 35%
Amount Owed 30%
Credit Score
New credit 10% Types of credit 10% Length of history 15%
Payment History 35%
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