Money Wise CreditFrom debt to wealth

Benefits of good credit• Convenience and

emergency protection for unexpected disasters

• Allows budget flexibility• Can help lower your

overall cost of living by making you eligible for best rates on insurance, interest, etc.

Why you may be denied credit• Lack of Credit References• Insufficient Income• Too short a period of

residency or employment• Derogatory Credit history• Too many Inquiries• Overextended with Credit• NSF Checks

Types of credit• Secured = Credit backed up by savings or

deposit equal to the amount of debt• Unsecured = Most credit, gas, and retail

cards• Installment = Fixed amount, fixed term,

fixed simple interest• Revolving = Variable amount,

undetermined term, variable monthly payment

How to obtain credit reports & scores

www.annualcreditreport.com1-877-322-8228

Annual Credit Report Request ServicePO Box 105283Atlanta, GA 30348-5283

1-888-397-3742www.experian.com

Experian475 Anton Blvd.Costa Mesa, CA 92626

1-800-888-4213www.transunion.com

TransunionPO Box 2000Chester, PA 19022

1-800-685-1111www.equifax.com

EquifaxPO Box 740123Atlanta, GA 30374-0123

What is credit scoring?

• A numerical score between 300-850

• Determines if credit is granted, the amount offered, and interest rate

• Bill payment history, number and types of accounts, late payments, collection actions, outstanding debt and age of accounts are all factors in assigning a credit score

Determining credit scores

An individual’s data is compared to consumers with a similar profile and a score is assigned based on factors that predict who is most likely to repay a debt

Credit scoring at a glance

Payment History 35%

Amounts Owed 30%

Length of Credit Record 15%

Types of Credit 10%

Inquiries 10%

Credit score guidelines

Each time a consumer’s credit information is accessed an “Inquiry” is added onto the credit report

The inquiry shows who accessed the credit report and the date of that action

Inquiries stay in a credit file for 2 years

Credit score guidelines (cont’d)

• Negative account information will be reported for 7 years

• Chapter 13 Bankruptcy filing stays 7 years from date of filing

• Chapter 7 Bankruptcy stays on credit record for 10 years

• Defaulted student loans, judgments on loans, and lawsuits can be listed longer

Credit Card Debt Statistics

• Payment patterns• Average debt per

household• Average interest rate

per household• Hidden costs and fees

Building Personal Wealth

Build wealth by paying yourself first.Your best financial investment is the one you make in yourself, because only you have your best interests at stake!

Breaking the Cycle of Debt

• Put yourself in control• Find out where you are today• Establish or update your Spending Plan• Track your successes• Reward yourself along the way

Stop Paying for Time!

• Minimum payments = maximum debt

• Paying off debt vs. managing interest

• How to save $23,425.78 in interest charges

From Average Joe to Joe Millionaire

• Pay down debt and save money to build wealth

• Set short-, medium-, and long-range financial goals

• Be focused and consistent• Remember: good credit and

smart money management habits benefit you

Money Wise Strategies

DO plan and set financial goals

DO pay yourself firstDO pay bills on time,

every monthDO reconcile your bank

and credit card statements monthly

X DON’T make just the minimum payment on your credit cards

X DON’T live above your means

X DON’T abuse creditX DON’T forget that credit

card terms and costs benefit the card issuer