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					   Can I, Like,
borrow 10 bucks?
 CREDIT: Your
Best Friend and
 Worst Enemy
     What is Credit?
• Credit is your reputation for
  financial responsibility
good credit means you pay
  stuff back on time
      What is Credit?
• Credit is the time allowed
  payment
you can‟t get credit (time to pay
  stuff back) without a good
  reputation (good credit rating)
  and you can‟t get a good credit
  rating unless you develop a good
  credit history.
     What is Credit?
• Credit is a source of revenue
  for banks
it‟s how banks make money!
     What is Credit?
• Credit is NOT more money, it
  is tomorrow's money
   Credit is NOT free
• Think of credit as „renting‟ the
  use of money.
• You have to pay INTEREST to
  the lender
 PROS and CONS of
    using credit
• PROS   • CONS
The Three C‟s of Credit
• Character



• Capacity



• Capital
           Character
• Your conduct and living
  habits
example:
  – Stability of residence,
    employment
         Capacity
• Can you earn enough to
  repay the loan?
Banks will take your income,
 and your expenses into
 account and decide whether
 or not you can afford to pay
 back the loan.
           Capital
• What do you own?
Banks are more likely to lend
 money to people who can
 back things up with collateral.
 Discussion Question

It can be said that credit is
 your best friend and your
worst enemy. What do they
          mean?
Credit Worksheet #1
  Good Credit, Bad
 Credit and No Credit
• Everybody needs good credit.
• The Credit Paradox:
     I can‟t get a loan because
 I have no credit, and I can‟t
 get credit because I can‟t get
 a loan!
  Good Credit, Bad
 Credit and No Credit
• To a bank NO CREDIT is just
  about the same as BAD
  CREDIT
   Your Credit Rating
• Credit Rating is:
• a “score” that tells people
  how well you pay stuff back.
• Most credit scores are
  computerized and accessible
  by any lender
       Credit Rating is
       Determined by:
•   Your payment history
•   Amount of debt carried
•   New accounts and inquiries
•   What kind of credit is used
The story of the filet
       knife




              What
                         Page 2
            Happened?
 Why is it difficult for
young people to get a
        loan?
  What can you do to
   establish credit
     worthiness?
• Open a bank account and
  save money
• Apply for credit from a local
  store
 (Dick‟s, Circuit City Charge,
 Sears, etc) and use it
 correctly.
• Have a steady job
 (more than 1 year)
BLOG!
    Analyzing Credit
• CORNELIA SMITH
   Analyzing Credit
• FRANK FELDMAN

				
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posted:4/10/2011
language:English
pages:25