Complete the True-False Quiz!

To obtain goods or services before

payment, based on the trust that

payment will be made in the future.

Benefits and Detriments of Credit

• Build credit• Big items; house, car,

college• Convenient & safe• Emergencies

• Easy to live beyond your

means

• Easy to get into credit

trouble

• Hard to get loans for big

items or emergencies

with bad credit

Credit 101

Installment : loans for a specific amount of money and are paid back monthly over a defined time period, or term. Car loans and mortgages are generally installment loans.

• Revolving: loans for an unlimited amount of time with different interest rates

The 3 C’s of Credit:

1. Capacity – do you have income to pay?2. Capital – do you have savings or other investments ?3.Character – how have you handled credit in the past?

They determine your credit score which determines your interest rate.

Credit Score

Payment History35%

Amount Owed30%

Length of history15%

Types of credit10%

New credit10%

Credit Score

Payment History35%

Amount Owed30%

Length of history15%

Types of credit10%

New credit10%

Credit Score

Payment History35%

Amount Owed30%

Length of history15%

Types of credit10%

New credit10%

Use Credit Wisely

• Pay on time• Pay in full or more than minimum• Evaluate purchases• Avoid Fraud

•Over limit fees•Convenience fees/interest•Cash advance