Learning Activity 5. 5-. 1. Good Credit. Credit History. Advantage. Credit Cards. Late Fee. Impulse Buying. High Interest Rates. Human Factor. Payments Schedule. The Essentials of. Bad Credit. Credit. ID: 712652 Download Presentation
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Presentation on theme: "IDENTIFY THE ESSENTIALS OF CREDIT"— Presentation transcript:
IDENTIFY THE ESSENTIALS OF CREDIT
Learning Activity 5
High Interest Rates
The Essentials of
TYPES OF CREDIT
Credit CardsShort Term LoansLong Term Loans
CREDIT CARD FACTS
Cards Cause a 32% Increase in Spending
Average Household Balance Is $5,700Average Indebted Household Is $7,743Average APR Is 15.00% PercentTotal Consumer Debt Is $3.3 Trillion
Amount Charged $ 5,000Interest Rate 18%Monthly Payments: 2% of BalanceTime To Pay Off Debt:
Tool to determine creditworthinessPoints are awarded for each factor that predicts reliability for debt repaymentTotal number of points (credit score) helps predict how creditworthy you are
Credit scores between 300 and 850Called FICO and BEACON Scores
WHAT IS A GOOD CREDIT SCORE?
No official guidelines, however roughly:751+
Excellent credit score. You should qualify for the best interest rate and loan terms. 720 – 750 Good credit score. There won’t be any problem in getting a loan at a good interest rate. 641 – 719 Average credit score. You may qualify for the loan but not at a good interest rate. 581 – 640 Poor credit score. You will have a tough time getting a loan or a credit card.
Bad credit score.
It’s doubtful that you will qualify for a loan or a credit card.