1. Open a savings account. Parents may be asked to cosign if minor

2. Open a checking account- Provides convenient method of paying bills

3. Open a store credit account- Parents/cosigners….promises to pay back if

borrower fails

4. Get a small loan5. Apply for a credit card

1 Minnesota (718)2 North Dakota (715)3 South Dakota (714)…

10 Wisconsin (707)

Governing.com

Your Payment History (35%)How you are currently making your

paymentsAccounts in collection or past due (and how

long)Public records (bankruptcy, child support,

etc.)

Your Overall Debt (30%)How much you owe on all your accountsHow much credit you have available to use

Your Credit Account History (15%)When you opened your accountsHow recently you applied for new creditRecent good credit history following bad

Types of Credit (10%)Different types of credit accounts you haveTotal number of accounts you have

New Credit (10%)

Credit score: helps creditors decide “if I give this person a loan, how likely is it that I will get paid back on time”FICO score (Fair Issac)300-850If 725<…5% chance of being 90+ days

late on payment over next 3 yearsIf 550…70% chance of being 90+ days

late on payment over next 3 years

FACT law- Fair and Accurate Credit Transactions Act (2003)Free copies of credit report each year

from 3 major credit agencies Equifax, Experian, and TransUnion Website: www.annualcreditreport.com

NEVADA 660TEXAS 667MISSISSIPPI 668

687

Credit Score range:300-850

You applied for credit under different name (Robert and Bob)

Someone made a small error in reading or entering information

You gave inaccurate social security number when filling out application

Loan or credit card payment were inadvertently applied to the wrong person

1. Get better credit cards2. Pay all your bills ON TIME3. Lower the balances on your credit

cards4. Pay off debt rather than move it

around5. Make sure your credit report is

accurate

1. Missing payments (regardless of the $ amt)

2. Credit cards at capacity3. Closing credit cards out4. Opening numerous credit cards in a

short time5. Shopping for credit excessively6. More revolving loans in relation to

installment loans

Files update continuously, and information stays in the file for 7 years

Bankruptcy information stays in file for 10 years

Fully enacted by February 2010 Rules include…

45 days notice to change certain termsBill must include how long it will take you to

pay off balance if you make just the minimum payments

No interest rate increases in 1st year (unless there is an intro rate or you are 60+ days late on payment)

Interest rate hikes only apply to NEW purchases

Due date always on the same day of the month (ex: 15th of the month)

Limited credit to adults under 21Credit card companies must stay 1000 feet

from college campuses if they are offering free gifts

Late fees capped at $25 if you are late once or less every 6 months

Gift cards can’t expire sooner than 5 years from date issued

1968 Consumer Credit Protection ActAlso known as Truth-Lending Law

Consumers must be fully informed of cost of using card Includes cash price, finance charge, APR, down

payment and amount of loan Fair Credit Billing Act

Creditors must resolve billing errors within specified period of time

Fair Debt Collection Practices ActDesigned to eliminate unfair and abusive

collection practices by debt collectors.

1. Name one type of “good” debt.2. Name one type of “bad” debt.3. Mary’s credit score is 720. Moe’s credit

score is 650. Name two possibilities of why Mary’s credit score is higher than Moe’s.

4. Your credit score is 600. You apply for a new job, and the employer checks your credit score. What does your low credit score tell a future employer about YOU?

5. Name one change that came from the Credit Card Act of 2009, and explain why it’s a positive change for consumers.