Financial Wellness Curriculum

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Financial Wellness Curriculum

• Good Credit Get It
• More information available at YouCanDealWithIt.com

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Credit Objectives

• What is credit?
• Needs vs. Wants
• Good debt vs. Bad debt
• The dangers of credit cards
• Understanding your credit report and credit
  score
• Eliminating credit card debt
• Debt Repayment Calculator
• Identity theft
• Free credit report

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What is Credit?

• Key terms
• Annual Percentage Rate (APR)
• Fixed
• Variable
• Introductory rate
• Default rate
• Grace period
• Minimum monthly payment
• Annual fees
• Finance charge

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Needs vs. Wants

• Needs are the basic things that are required for
  your safety and health, including food to keep
  you alive, clothing to keep you warm, and a
  shelter to protect you.
• Wants, on the other hand, are items you desire
  but are not critical to life.

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Good Debt vs. Bad Debt

• Sometimes it makes sense to borrow -- but a lot
  of times it doesn't.
• Good Debt Items that will grow in value such
  as a home, education or investments.
• Bad Debt - Includes debt youve taken on for
  things you dont need and cant afford by using
  credit cards or store charge cards.

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The Dangers of Credit Cards
Are you only making the minimum monthly payment?
If so you will end up paying almost double for
your purchase.
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Test Your Credit Card IQ

• Credit cards wont hurt my credit report if I
  dont carry a balance.
• I dont have to pay any interest during my grace
  period.
• A credit card company cant increase the interest
  rate if my payments to them are always on time.
• Your credit report and score is something you
  dont need to worry about until you buy a house
  or car.
• Credit and debit cards are the same.
• Good credit can help you get a better interest
  rate on loans, car insurance and even a job.

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Understanding your Credit Report
POTENTIALLY NEGATIVE ITEMS Credit Items 123
Visa Status Past due 60 days Date Opened
Type Credit Limit/Original Amount 10/2/2005 Re
volving 1,000.00 Reported Since Terms High
Balance 2/20/2006 NA 852.27 Date of Status
Monthly Payment Recent balance
5/1/2006 0.00 745.39 Last Reported
Responsibility Recent payment 7/1/2006 Individu
al 0.00 ABC Bank Status Past due 30
days Date Opened Type Credit Limit/Original
Amount 11/20/2003 Installment 9,350.00 Report
ed Since Terms High Balance 2/20/2006 60
months 9,350.00 Date of Status Monthly
Payment Recent balance 5/1/2006 225.00 6,23
4.08 Last Reported Responsibility Recent
payment 7/1/2006 Individual 225.00
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Understanding your Credit Report
ACCOUNTS IN GOOD STANDING ADS Retail Status
open/never late Date Opened Type Credit
Limit/Original Amount 10/1/2003 Revolving NA
Reported Since Terms High Balance 10/1/2003
NA Unknown Date of Status Monthly Payment
Recent balance 10/1/2003 0.00 Unknown
Last Reported Responsibility Recent
payment 11/1/2003 Individual 100.00 DJL
Dept Store Status closed/never late Date
Opened Type Credit Limit/Original
Amount 9/1/2002 Revolving 500.00 Reported
Since Terms High Balance 3/1/2003 NA 85.00
Date of Status Monthly Payment Recent balance
5/1/2003 15.00 0.00 as of 5/1/2003 Last
Reported Responsibility Recent
payment 5/1/2003 Individual 35.00
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Understanding your Credit Report
REQUESTS FOR YOUR CREDIT HISTORY Requests
viewed by others TLC Reality Co Date of
Request 900 Front St 5/14/2006 Any town, PA
1111 AAA Department Store P O Box 700 Date
of Request Some town, PA 12222 3/26/2006 Requ
ests Viewed by you One Bank 999 Walnut
St Date of Request Some town, PA
12222 38802 National Bank 123 River Rd
Date of Request Main town, PA
11333 11/3/2005
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Understanding your Credit Report
PERSONAL INFORMATION Names Employers John
J Smith ABC Architects John Smith J J Smith
Address Jon Smith 123 Green St Some
town, PA 11111 Date of Birth 7/4/1976 104
Water St Anywhere, NJ 33333 Spouse's Name
Jane
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Fixing Errors on Your Credit Report

• Write to the consumer reporting company and
  explain what information is inaccurate.
• Credit bureaus will review the documentation and
  if further investigation is required, they
  will provide a copy to the source that furnished
  the disputed information to them.
• The source will then review the information and
  report back to the credit reporting company.

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Understanding Your Credit Score

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The Effects of Your Credit Score

• Eligibility for future credit
• Insurance
• Employment
• Housing
• Interest rates on future loans

300 850
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Improving Your Credit Score

• Make your payments on time.
• Establish a long term account with a reputable
  credit card company.
• Dont take on more debt than you can handle.
• Dont get caught up in credit repair scams.

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Eliminate Credit Card Debt

• Track your spending
• Stop using your credit cards
• Stop new credit offers
• Call 1-888-5-optout
• Consolidate your debt
• Use automatic bill pay
• Create a budget
• Budget a specific amount to pay on your credit
  cards until ALL are paid in full.

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Eliminate Credit Card Debt
Account balance 2,500 Interest rate 15
Account balance 5,000 Interest Rate 15
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Debt Repayment Calculator

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Identity Theft

• Dont give out your Social Security Number unless
  you are absolutely certain of who you are giving
  it to, why they need it and what they will do
  with it.
• Never give out personal information on the phone
  to someone who initiated the call. If you are
  uncertain hang up and call the companys
  headquarters.
• Examine your financial statements to ensure all
  charges made are yours.
• Review and monitor your credit reports regularly.
• Shred and destroy unneeded documents that contain
  personal and financial information.

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Identity Theft

• Immediately report lost or stolen credit cards.
• Do not carry your social security card or birth
  certificate.
• Keep your ATM and Debit Card receipts, do not
  leave these behind.
• Bring in your mail daily.
• Keep important documents in a safe and secure
  place.

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Reporting Identity Theft

• Contact the fraud departments of any one of the
  three consumer reporting companies to place a
  fraud alert on your credit report.
• Close the accounts that you know or believe have
  been tampered with or opened fraudulently.
• File a report with your local police and in the
  community where the identity theft took place.
• File your complaint with the FTC.

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Free Credit Reports

• Request your free credit report one of these two
  ways
• Go to annualcreditreport.com
• Call 1-877-322-8228
• This is the only authorized source for consumers
  to access their annual credit report online for
  free.
• Be sure to order from the agency listed above.
  If you go directly to the credit reporting
  agencies, you may be charged.

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Credit Objectives Recap

• What is credit?
• Needs vs. Wants
• Good debt vs. Bad debt
• The dangers of credit cards
• Understanding your credit report and credit
  score
• Eliminating credit card debt
• Debt Repayment Calculator
• Identity theft
• Free credit report

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