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Financial Literacy: Credit 101

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Kathryn Anderson

on 12 April 2017

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Transcript of Financial Literacy: Credit 101

Financial Literacy:
Credit 101

Warm Up
Work Shop Agenda
Overview of Objectives
Defining Credit
Credit Scores & Reports
Financial Traps
Final Questions/Discussion

Creative Thinking Techniques

Credit: Advantages
Credit: Disadvantages
Cool Down
What have you learned so far? Take a few minutes to reflect and answer questions 1-5 on the back of the survey.

Responsible Credit Use Begins With....
Asking yourself, “Can I really pay it back?”
Having a plan for paying it back
Knowing the vocabulary
Asking the right questions
Knowing what’s at stake
Having self-discipline
Reading the fine print

Pay for larger items (houses, cars, tuition)
Using purchases while (or before) paying for them
Convenience (credit cards)
Record-keeping online
Perks/rewards
Building a positive credit history

Impulse buys
High cost to borrow (high interest rates/fees)
Sneaky lender practices
Extra homework- checking for incorrect/fraudulent credit card charges
Not paying the lenders back regularly leads to a poor credit history
Using Credit

Credit Report

Credit Report:
detailed report of an individual’s credit history
Major credit bureaus: Experian, Equifax, and TransUnion

Credit Scores
A number that represents your "credit worthiness",
your ability to pay your bills, and pay them on time.

Introduction
Kathryn Anderson
AmeriCorps Student Support Specialist
Workforce Education Office
Phone: 206-934-7478
Email: kathryn.anderson@seattlecolleges.edu


1. You borrow money.
2. You use the money to pay your expense(s).
3. You pay back that loan later-usually with interest.

How is this different from using Debit?

BREAK (10 min)
Financial Traps
Warm Up
Getting to know your facilitator...
For more information on reading Credit Reports: visit
http://www.aie.org/manage-your-money/understand-credit/your-interactive-guide-to-credit-reports.cfm


Payday Loans
: short-term borrowing of a a small amount at a very high rate of interest.
"Work from Home" Jobs:
Biggest clue:
asking for you to pay money for “more information” or a “starter kit”
Tip
: check out the advertising business in the Better Business Bureau (BBB)
Look Familiar?
5 Types of Credit
Revolving

Installment

Open Charge

Utility

Mortgage


Rent-to-Own Items:
Rent TV’s, computers/electronics, appliances, beds, & furniture when you cannot afford the full price.
Weekly fee
Set number of weeks
When the time is up, the item is yours!
Draw backs-
often the weekly fee will add up to be more than the original price.
Car Title Loans:
Similar to payday loans, but your car title becomes collateral
Short-term, high interest rate
Failure to pay back the loan can lead to losing your car

Student Loans
Can easily become a financial trap
if
you don’t do your research.
How do you go about repaying student loans?

Final Take Away Points
Always
fully read the terms & conditions of
any
loan.
Create a pay-back plan early on.
Don't borrow more than you need.
Talk to a Professional!
Clearpoint Credit Counseling Solutions- Northgate
American Financial Solutions- Downtown
El Centro de la Raza- North Beacon Hill
Credit Karma- https://www.creditkarma.com/
More info @ https://studentaid.ed.gov/sa/repay-loans
Questions?
Thank You!

1. As long as you pay all your bills on time, you don't need to check your credit report or credit score.

2. Your credit score does
not
drop if you check your own credit.

3. As long as I pay off my bills, the fact that they're late will not affect my credit report or credit score.

4. When co-signing on a lease or loan, you are still responsible for the account.

5. When you can't pay back what you owe, your only options are to go to a debt settlement company, or declare bankruptcy.
Begin to understand the advantages an problems with using credit.
Learn the basics of responsible credit use.
Learn the basics of credit scores and reports.
Learn about financial traps, and what to avoid.
Identify resources for further information.
Objectives
Draw a map to somewhere you visit often.
List/draw details about how you get there and what you see/hear/sense along the way.
https://bettermoneyhabits.bankofamerica.com/en/credit/top-credit-questions
Full transcript