Key Terms Section 10.1 & 10.2  Why should you be careful not to take on more debt than you can easily repay? *Credit *Equity *Creditworthiness *Character.

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Presentation transcript:

Key Terms Section 10.1 & 10.2  Why should you be careful not to take on more debt than you can easily repay? *Credit *Equity *Creditworthiness *Character *Capacity *Capital *Credit History Question to think about!

Section 10.1 & 10.2  Goals  Health  Illness  Off of work Why Borrow?  Home  Education

Section 10.1 & 10.2  Total debt payments  excluding housing costs  no more than 20-25%  of your take-home pay. How Much Should I Borrow?

CharacterCapacityCapital Are you dependable? Past borrowing Stability of job Pay bills on time Income sufficient to pay loan? What other expenses do you have? Value of what you own -house -investments -savings The Three Cs Section 10.1 & 10.2 Quiz

Key Terms Section 10.2 & 10.3  Why is a good credit rating so important? *Credit Bureau *Credit Rating *Secured Loan *Collateral *Installment Loan *Unsecured Loan Question to think about!

Section 10.2  Three largest  TransUnion  Equifax  Experian Credit Bureaus  Information comes from  Stores  Banks  Utility companies  Court records  What is on it?  Bounced checks  Missed a payment  Been sued

Section 10.2 Credit Report 1.Identifying Information 2.Credit History 3.Collection Agency Info 4.Public Record Info 5.Inquiries

Section 10.2 Credit Rating FICO Score Payment History 2.Current Debt 3.Length of Credit History 4.New Accounts and Inquires 5.Type of Credit Used Who would you loan to?

Key Terms Section 10.3  Do you believe that your credit history could help or hinder you if you applied for a loan? In what ways? *Regular Charge Accounts *Revolving Charge Accounts *Grace Period *Credit Limit Question to think about!

Section 10.3 RegularRevolvingSources Pay balance in full American Express Diner’s Club Some department stores Carry a balance from one month to another VISA MasterCard Discover Many more Credit Cards Credit Card Costs Annual Fees Interest Limits and Penalties Credit Card Statement & Interest building credit worksheet!

Key Terms Section 10.4 & 10.5  Why should all couples discuss money and credit before they get married? *Finance Charge *APR *Acceleration Charge *Balloon Payment *Identity Theft *Debt Consolidation Loan *Bankruptcy Question to think about!

Section 10.4 & 10.5  Truth in Lending  Calculate costs the same way  Equality in Lending  Illegal to refuse credit based on race, religion, gender, marital status, age  Fair Credit Reporting Act  Fair Credit Billing Act  Fair Debt Collections Practices Act Credit Rights Credit Responsibilities  Accept Responsibility  Know Your Debt Capacity  Credit and Family  Self-Control with Credit Dave Ramsey and Study Guide

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