Credit Wise
This section offers individuals and families’ resources on credit management, credit reports, and credits scoring so consumers don’t fall into the credit trap.
What is credit?
Credit is borrowing money to pay for things.
Why do people use credit? - The pro’s and con’s
Pro’s – Credit is available for emergencies; it allows you to make large purchases, and it is convenient.
Con’s – Credit is expensive.
The three main factors lenders look at when determining credit…
Capacity – Capacity is the present and future ability to make payments.
Capital – Capital is savings and other assets
Character– Character describes how you have paid your bills in the past.
How much credit can I afford?
Deciding how much credit you can afford is a very personal decision. The National Institute for Consumer Education at Eastern Michigan University has put together guidelines to help individuals figure out how much credit they can afford.
Defining important credit card terms?
Annual Percentage Rate - this is a rate that is charged on your unpaid balance of credit
Credit Limit - the amount of credit you are allowed to borrow from a particular company
Finance Charges/Fees - fees assessed for the cost of using credit
Grace Period - the time period before your credit card starts charging interest on your new purchases
Interest - Cost of using credit
For more information on the basics of credit, The Consumer Credit Savvy Bulletin offers a general description of credit and credit usage.
Credit Calculators
The University of Illinois Extension offers an array of financial calculators
to assist families in a variety of credit options. Here are a few of them
for your use.
Credit Reports/Credit Score
What is a credit report?
A Credit Report is your financial history. It describes identifying information, your credit history, any public record information, and inquiries that may be out on you.How often should I check this report?
This report should be checked annually to ensure that it is correct. Also, checking all three reporting agencies is good to ensure that they are all accurate.
Where do I go to get my credit report?
Visit the three credit reporting agencies to review your credit report.
What is a credit score?
The credit score is a scientific method that uses statistical models to assess an individual's credit worthiness based on their credit history and current credit accounts.
www.consumerinfo.com/n/cdtscore.htm or www.myfico.com
Where can I go for more information?
Federal Trade Commission - Offers an array of free/low cost credit publications available from the Federal Government.
For information regarding curriculum useful in teaching credit, please click on the Curriculum listing to the left.