Credit for the Rest of Us © The Money Professors (TM) Career and Technical Education Summer Conference Len Rhodes M.B.A. C.P.F.M. Mark C. Weitzel M.B.A. C.P.F.M. July 25, 2013

Playing the Game © The Money Professors (TM)

Playing the Game © The Money Professors (TM)

What Lenders Want Lenders Measure Your ability to pay Your likelihood that you will pay

5 Cs of Credit Character - willingness to pay your bills on time. Capacity - your ability to pay the loan. Capital - your net worth. Collateral - something you own that the lender can take if you dont pay. Conditions - what are current economic conditions.

What Lenders Want Credit Report Reporting Agencies Equifax, Experian, Trans Union Free Credit Report Data Collected Name, address, SSN, loan amounts Payment history from lenders, phone and utility, hospital, etc.

What is a Credit Score? © The Money Professors (TM)

What is a Credit Score? A report card on how you handle your money More specifically, on how you handle your debt © The Money Professors (TM)

Why Use a Credit Score? People with messy finances also lead messy lives © The Money Professors (TM)

What Makes a Credit Score? © The Money Professors (TM)

Credit Score Score Range Rating % of US Population Extra Cost Per month for a 200K Loan 780+Perfect20$ Excellent20$ Average20$ Fair20$242 Below 620Low20$353 © The Money Professors (TM)

FICO: The Only Score that Matters © The Money Professors (TM) Get a copy of your credit report: NOT freecreditreport.com Your FICO Score is the only number that matters.

Credit Costs Dollars Lowering your risk to the lender lowers the cost of your credit Increasing your risk to the lender increases the cost of your credit Your Risk to Lender Your Interest Rate LowHigh Your Risk to Lender Low High

Credit

Credit Cards Advantages No need to carry a lot of cash Buy now, pay later Easier bookkeeping Much more convenient

Credit Cards But Much more convenient Buy now, pay later Cost $$$$$$ #1 cause of over spending Many hidden costs Obligates future income They really are out to get you!

Buyer Beware!

Credit Card Rules

Credit cards are not to be used to supplement your income

Credit Card Rules Credit cards are not to be used to supplement your income Life is full of emergencies

Credit Card Rules Credit cards are not to be used to supplement your income Life is full of emergencies You need to understand how to use a credit card before you should get one

Credit Card Rules Credit cards are not to be used to supplement your income Life is full of emergencies You need to understand how to use a credit card before you should get one Know the credit card tricks so you can avoid them

Credit Card Tricks Use your card for everything! You get points when you make purchases Rates that arent real Balance transfer fee of 4% 0% or low rates you lose with one mistake Lowest interest rate gets paid first No grace period on purchases Ever-increasing credit limit Decreasing minimum payment

Credit Card Rules Credit cards are not to be used to supplement your income Life is full of emergencies You need to understand how to use a credit card before you should get one Know the credit card tricks so you can avoid them Seek assistance if you get into trouble with your credit cards

Credit Cards What can you do? Choose well – shop around ( Read offer (contract) – Schumer box Negotiate better terms Ask for a lower rate Ask to waive a fee Pay on time – online or direct draft Complain Attorney General (

Credit Cards Ruth Owens Discover Card Social Security Disability $1900 limit 6 years ago Minimum payment for 6 years totaling $3492 $5564 balance Discover sued her!

Credit for the Rest of Us © The Money Professors (TM) Career and Technical Education Summer Conference Len Rhodes M.B.A. C.P.F.M. Mark C. Weitzel M.B.A. C.P.F.M. July 25, 2013