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Good Credit is an Asset. Agenda Your Financial Foot Print Good Credit Poor Credit Student Loans Housing and Credit.

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Presentation on theme: "Good Credit is an Asset. Agenda Your Financial Foot Print Good Credit Poor Credit Student Loans Housing and Credit."— Presentation transcript:

1 Good Credit is an Asset

2 Agenda Your Financial Foot Print Good Credit Poor Credit Student Loans Housing and Credit

3 Financial Footprint Credit: (Webster) Something entrusted to another; time given for payment of goods sold on time; financial trustworthiness Each of us needs to manage our credit portfolio It’s called a credit report

4 Your Credit Score The higher your score, the less credit will cost Your score determines; Interest Rates, Auto, & Homeowner Insurance rates; Utility deposits, and the ability to obtain new credit

5 Your Credit Score Know what's in your credit history Pull your reports annually Dispute inaccuracies

6 Your Credit Score What makes up your score Revolving Credit Secured Debt What do I need to establish credit (Credit) Income, bank accounts (checking, and savings), Joint Accounts Authorized User Accounts Pre-Paid Credit Cards Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, Must be 21

7 Guide for Credit Use Using credit is a promise to pay in the future Pay off balance each month to improve your credit score What Owing Money Cost You Paying the minimum on a $5,000 balance at 18% interest, will take 23 years to repay, and cost $7,000 in interest Know your Cards

8 Guide for Credit Use If you can’t pay the full balance; always pay more than the minimum payment due Credit limits/maxing out cards, hurts score Eternal Vigilance is the price of survival Money & Love Don’t Mix (Co-Signing) Never loan more than you can afford to lose

9 Ways to Improve Finances Be a year round discount shopper ( Never pay retail ) Leave Credit Cards at home (Caring a credit card balance is like walking with holes in your pockets) Ask for what you want (price matching) Practice delayed gratification (Never use shopping for entertainment) Pay off debt slowly (get control) Prepare for tax changes

10 Ways to Improve Finances Open a savings account Make it automatic Make better 401K choices Shop for monthly services ( Insurance, Phone, Internet, etc. ) Leverage your credit card ( Collect Rewards ) Make a grocery list, and stick to it Live within your means

11 Credit!!! Things Credit Wont’s Buy Gambling Chips (Am Ex, Discover) Lottery Tickets (Am Ex, Discover)

12 How long will it hurt Trade lines with favorable data are retained 10 Yrs. Trade lines that indicated a delinquency 7 Yrs. Collection items paid/unpaid 7 Yrs. – Medical Collections (Hurting Less in the future) Bankruptcies Chapter 7 or 11 retained 10 Yrs. Bankruptcies Chapter 13, retained 7 Yrs.

13 How long will it hurt Judgments 7 Yrs. from date filed Unpaid Tax Liens report indefinitely from date filed Paid Tax Liens 7 Yrs. From date paid/released

14 Blunders & Rebuilding What Credit Reporting Agencies Do Your track record of payments (good/poor) How much you owe (managing debt limits) How long you have had established credit Whether you are taking on new credit Types of accounts you have opened

15 Rebuilding You Rebuild your history Takes time to improve history (late pmt’s 7 yrs.) Pay on time – score will begin to recover One single payment 30 days late takes 6 to 12 months to recover Removing delinquent accounts: Never settle a debt without first obtaining a written guarantee from the company

16 Rebuilding Debt Management Plans: accounts will be closed can have a negative impact Settling Credit Card Debt for less than you owe requires missed payments settle before 180 days best

17 Student Loans Acquiring the loan may be the easy part Paying may be difficult Consolidation Pro – Consolidating helps you lock in a low interest rate. Con – Consolidating can increase the overall cost of your loan.

18 Student Loans Pro – Consolidation makes it easier to manage your debts. Con – Consolidation requirements can be tough Pro –Consolidating your student loans can help increase your credit score by reducing the number of open accounts on your credit report increase your credit scorecredit report Con – Consolidation may not be your best option. There are other programs available to help you repay your loans or have them forgiven

19 Student Loans Obama’s bill; undergraduates will pay 3.86% interest on their government sponsored student loan, and graduate students 5.4% Private lenders; Sally May & Wells Fargo will know what students are paying for Government loans (competition)

20 Homebuyers & Credit Before you buy: Get your credit score and make sure its accurate The better your credit score, the lower in general your payment will be Figure out how much home you can afford Your mortgage payment should be no more than 29% of your gross monthly income

21 QUESTIONS?


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