Credit If someone does not have enough money to satisfy their needs or wants they have to borrow i.e. get credit. © Annie Patton Next Slide

I WANT I WANT A CAR, A HOLIDAY,A HOUSE, A BIGGER HOUSE. I WANT I WANT MORE THAN WOULD MAKE A POOR MAN RICH © Annie Patton Previous Slide Next Slide

All loans have to be paid back with interest. Caution People need to be careful how much they borrow. Credit needs to be treated with Responsibility All loans have to be paid back with interest. So credit is expensive. © Annie Patton Previous Slide Next slide

Types of credit Loan Overdraft Mortgage Credit card Previous Slide © Annie Patton Previous Slide Next Slide

They give you a loan, as they have your Collateral. I give them the deeds of the house, share certificates or a valuable picture etc. They give you a loan, as they have your Collateral. © Annie Patton Previous Slide Next slide

Unsecured Loan I give nothing Deeds of No 4 New Street Secured Loan. I give Art Unsecured Loan I give nothing © Annie Patton Previous Slide Next Slide

Consequences of not paying back a loan Now I have the Loan!!! So what if I don’t repay it. Be warned banks have long memories, they will even tell on one, if one fails to make their repayments or fails to make their repayments on time. © Annie Patton Previous Slide Next Slide

20% skip more stop skipping Debt Ratio The percentage of ones wages that goes on loan repayments. 20% skip more stop skipping Loan repayments ----------------------- wages X 100 If this is too high I will stop skipping Or 40% or more if the mortgage is included stop skipping © Annie Patton Previous Slide Next Slide

A good shopper of credit Click here for more information © Annie Patton Previous Slide Next Slide

Credit Score (Credit History) A credit score - helps predict how creditworthy you are, that is how likely it is that you will repay a loan and make the payments when due. In order to calculate your credit score the following will be looked at: Bill-paying history The number and types of accounts you have Previous late payments If you have applied for new credit recently Outstanding debt How long you've had existing accounts © Annie Patton Previous Slide Next Slide

The three Cs of good credit Client (Score) History: How responsible you are about paying bills on time. Capacity: Your ability to pay back a loan based on your income and financial position. Collateral: Security for the lender in case you don't pay back the loan. A house, for example, would be used as collateral. Client Score Capacity Collateral © Annie Patton Previous Slide Next Slide

Useful, but needs to be treated with Care Credit Useful, but needs to be treated with Care © Annie Patton Previous Slide Next Slide

Examples of a credit agreement are a mortgage, a car loan, a personal loans, a credit card agreements and hire purchase agreements. Hire Purchase Credit card Personal Loans Car Loan Mortgage Credit Score © Annie Patton Previous Slide Next Slide

Irish Credit Bureau Banks in Ireland register all credit agreements and the history of how the credit was repaid with the Irish Credit Bureau. When a bank receives an application for a credit agreement, they seek the applicant’s credit score with the Irish Credit Bureau. Note the Irish Credit Bureau does not make any decision re credit applications, they just provide the information to the banks. © Annie Patton Previous Slide Next Slide

Credit Useful, but needs to be entered into with care and treated with responsibility © Annie Patton Previous Slide