1. Warm-up On your notes, respond to one of the following:
Describe a time you borrowed something, but didn’t give it back in a timely manner, if at all. What were the consequences?
Describe a time someone borrowed something from you, but didn’t give it back in a timely manner, if at all. What were the consequences?

2. Credit
The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

3. How Credit Works
Based on your credit score, your loan (credit) will be more or less expensive

4. Who gives you credit?
Banks and Credit Unions

5. Who gives you credit? Consumer Finance Companies
A company that loans money to people who often cannot get loans from banks

6. Who gives you credit? Consumer Finance Companies
Specific companies might have their own finance company you can use to get a loan from

7. Who gives you credit? Consumer Finance Companies
Problem: Often charge high interest rates

8. Who gives you credit?
Credit Card Companies

9. Who gives you credit? Mortgage Lenders (homes)
Auto-Finance Companies (cars)
Furniture Stores (furniture)

10. Who gives you credit? Payday lenders (remember the documentary?)
You use your next paycheck as collateral for the loan
Often results in cycle of borrowing and massive debt

11. Who gives you credit? Pawn shops and Check cashing stores
Problem: Will charge you very high interest rates!

12. Who gives you credit? Government College loans!
Student loans are never forgiven, even if you declare bankruptcy

13. Who gives you credit?
Family, friends

14. Who gives you credit?
You can borrow from an insurance company against the value of your policy

15. Benefits of Credit
Don’t have to carry cash

16. Benefits of Credit
Easier to shop online

17. Benefits of Credit
Good for emergencies

18. Benefits of Credit
Needed a lot of times to rent cars/hotels

19. Types of Credit
Credit Card

20. Types of Credit
Student Loans

21. Types of Credit
Real Estate Loans
Mortgage (home loans)

22. Types of Credit
Cash loans

23. Types of Credit
Car loans

24. Types of Credit
Advance pay loans

25. What affects your credit?
To qualify for credit/loans:
The 6 C’s

26. What affects your credit?
The 6 C’s
Character (integrity)

27. What affects your credit?
The 6 C’s
Capacity (you have the money to pay it off)

28. What affects your credit?
The 6 C’s
Collateral (you have assets they can take if you don’t pay off your debts)

29. What affects your credit?
The 6 C’s
Capital (your worth)

30. What affects your credit?
The 6 C’s
Conditions (what is your condition and what is the condition of the overall economy)

31. What affects your credit?
The 6 C’s
Credit History and Scores (have you paid off loans in the past without late payments, etc.)

32. What affects your credit?
The 6 C’s
Character (integrity)
Capacity (you have the money to pay it off)
Collateral (you have assets they can take if you don’t pay off your debts)
Capital (your worth)
Conditions (what is your condition and what is the condition of the overall economy)
Credit History and Scores (have you paid off loans in the past without late payments, etc.)

33. How can you memorize the 6 C’s
The Method of Loci

34. How can you memorize the 6 C’s
The Method of Loci
The six things you see going from H-Hall to New Gym
Mr. Salvato’s room—character (integrity)
Commons—capacity (ability to pay)
School Store—collateral
Library—capital (net worth)
Guidance—conditions of you and economy
New Gym—credit history and scores