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HOW TO QUALIFY FOR CREDIT CH 10, 10.2 How to get credit.

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Presentation on theme: "HOW TO QUALIFY FOR CREDIT CH 10, 10.2 How to get credit."— Presentation transcript:

1 HOW TO QUALIFY FOR CREDIT CH 10, 10.2 How to get credit

2 Credit Information References: help verify your credit record Helps company to decide if you are credit worthy Types of questions cover; what you earn, how long you work for your current er, property owned, other debts

3 The 5 C’s of Credit Character Capacity Capital Collateral Conditions

4 Character Honesty Willingness to pay Past reputation regarding debt Future predicted by the past

5 Capacity Ability to pay Look at income Must decide if granting credit is wise Sometimes, even if income is high, granting additional credit is unwise.

6 Capital Assets and your net worth Includes cash, investments, personal property and any items of value Lender wants to know you have enough capital to pay back the loan

7 Collateral Value of your possessions May be used to repay your loan

8 Conditions What is the current state of the economy (ie. High unemployment, recession)? Tries to establish security of your job and the company that employs you.

9 How Do They Figure Out MY Credit??? FICO (Fair Isaac COmpany) Scores come from 3 different agencies: Equifax, Trans Union, Experian

10 My credit con’td Score ranges from 300-850 (the higher the better) Minimal difference between agencies

11 Things that can lower your credit score Applying for a lot of credit all at once Missing payments on bills Filing for bankruptcy Maxing out your credit card continuously Having a lot of accounts open

12 KEEP AN EYE ON YOUR SCORE Allows you to request a free credit report every 12 months from all 3 agencies.

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