what is your credit scores?

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What is your Credit Scores?. A Four Corners Activity. Opening Activity: Discuss. What is a credit report? How does someones credit report impact his or her financial opportunities?. Learning Objective. Describe how a credit score is calculated, improved, and monitored. - PowerPoint PPT Presentation


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What is your Credit Scores?A Four Corners ActivityOpening Activity: DiscussWhat is a credit report?How does someones credit report impact his or her financial opportunities?Learning ObjectiveDescribe how a credit score is calculated, improved, and monitoredFour Corners ActivityYou will hear a question regarding credit scoresPlease go to the corner (A, B, C, or D) that you think best answers the questionQuestion #1How many major credit reporting agencies are there in the United States?A. 2B. 3C. 4D. 5Answer #1: B There are three major credit reporting agencies in the United States: Equifax, Experian, and TransUnionIf you want to check your credit, you will have to receive a report from each one of these companiesThat being said, you can request a copy of your credit with just one telephone call or web form: 1-877-322-8228 or www.annualcreditreport.comQuestion #22. The Highest score you can get on a credit report isA. 750B. 800C. 850D. 900

Answers #2: CThe highest score a person can earn on their credit report is 850. The lowest score someone can receive is 300The average score is 700Question #33. Anything below ______ will place you in the sub-prime borrowing category. This category means you are at risk for not paying off your credit card, loans, and bills. A. 700B. 600C. 500D. 400Answer #3: B For most companies, a credit score below 600 means you are a credit risk. The company will charge you a higher interest rate to ensure they make money if you do default (not pay off the debt)Question #4:4. Banks usually charge customers with sub-prime credit scores a higher interest rate. It is usually _____ % higher than the interest rate given to customers with good credit. A. 1B. 2C. 3D. 4

Answer #4: A or BThe sub prime credit rate is usually 1-2% higher than the best rate available.It can also have additional fees tacked onWith large purchases such as a home, it makes a big difference in how much they will lend you and therefore in what type of home you can afford

Question #54. Which of the following items does NOT impact how your credit score is calculated?A. how much money you makeB. how many credit cards you haveC. how many accounts you have paid off D. how many companies have looked at your credit scoreAnswer #5: AYour credit score may list your employer but it does not list your incomeYour credit score is calculated based onBill paying history: What and who do you owe?Credit/payment history: Have you been paying your debt?Collections for any unpaid sums: Have you ever paid late or not paid at all?Recent Activity: Who is looking at your credit score? Do you plan to get new debt?Any court judgments for bankruptcy

Question #6:True or False: You need a credit card to have a high credit score.Go to corner A if you think this is trueGo to corner B if you think this is falseAnswer #6: FalseYou do not need a credit card in order to have a high credit scoreYou simply need a responsible credit history, meaning you pay your bills on time Your bill could be a utility contract, home mortgage, or car loanIn fact credit cards can lower your scoreCreditors think that another loan or credit card would over tended your budget. This is why the consider not only how much debt you have but also how much debt you could possibly have In other words, what have you charged and what could you charge in the future?Question #7:The best way to improve your credit score is toA. Pay your bills on time each monthB. Pay off all credit cards, loans, and liens so you are totally debt freeC. Make more moneyD. Get several credit cards and pay the minimum fee each monthAnswer #7: AIf you want a good credit score than you need an established history of paying your bills and debt on time.You could have paid off all your debt but have a default loan in your credit historyThis will lower your scoreSeveral open credit cards on your account could lower your score. You could have high debt and also what is called high possible debtQuestion 8:8. How long does your financial history stay on your credit report?A. 1 yearB. 5 yearsC. 10 yearsD. 15 yearsAnswer 8: CEverything car loan, mortgage, and credit card stays on your account for 10 years.In others a foolish decision could impact your purchasing power for an extensive period of time Question 9:8. People who have been debt free for 10 years haveA. A low credit scoreB. A high credit scoreC. No credit score

Answer 9: CCredit reports are calculated on a persons ability to pay off debt.If a person does not have any debt the credit bureau has no way to establish whether he or she will pay off debtThey therefore give them a No Score availableEach company handles these situations differentlyMany ignore the persons credit report and look instead at how much money they have saved Question #10:6. How often can you check your credit report for free?A. Every 6 months B. Once a yearC. Once every 2 yearsD. Once every 3 yearsAnswer #10: BYou can and should check your credit score once a yearYou want to make sure no one else is using your personal information fraudulentlyYou also want to make sure that your lenders are reporting information about you accuratelyQuestion #117. What percent of Americans find errors on their credit reports?A. 20%B. 55%C. 75%D. 95%Answer #11: CThe most common error Americans find: an account that has been closed is listed as open.Another 22% find an account that has been duplicated so they have two of those credit cards or home mortgagesAgain this would negatively impact your score since it is debt that over extends your budgetQuestion #128. When you find an error on your credit report you shouldA. Call the lenderB. Call the credit reporting agencyC. Call the neutral company listed by the crediting agencyD. Call your lawyer Answer #12: BIt is best to actually write the credit agencyIn the letter you should Report the errorInclude the account number Attach a copy of the inaccurate credit reportGet return receipt to prove your requestAccording to the law, the credit bureau has 30 days to fix their errorAfter this time period you can file a complaint with the Federal Trade Commission or your states Consumer Affairs Division Summary:It is easier to get a high credit score than it is to repair a low credit scoreMonitor your credit score each year

Exit Activity: Give Me 5 SummaryTopic sentence: Each American should act responsible with his or her credit report.As a class we need to identify 5 details that support this claim.How do businesses use your credit score?What happens if we have a bad score?Why should we monitor our credit score each year?How long does each credit account stay on our account?