CreditBe a

financialgenius.

Advantages of credit

Get it now

No cash… No problem.

Keeps records

Easy

Consolidates

Disadvantages of credit

Interest & fees

Financial difficulties

Impulse buying

The Four “C’s” of Credit

1. Character

2. Capital

3. Collateral

4. Capacity

Types and sources of credit

❶Single Payment

❸Revolving

❷Installment

Using Credit Responsibly

❶ Borrow only what you can repay

❷ Pay on time

❺ Don’t share your information

❹ Report lost or stolen credit cards

❸ Keep creditors in the loop

Building Credit

❶ Steady work

❷ Pay your existing bills

❺ Credit card or small loan

❹ Clean checking account

❸ Grow Savings

20 - 10

Rule of:

Rule: Never borrow more than 20% of Net Income.

Example:

$4,800 X 20% = $960

Rule: Monthly payments shouldn’t exceed 10% of

monthly Net Income.

Example:

$4,800 X 10% = $480

House payment should not

be counted.

Exception:

Compound interest is theeighth wonder of the world.

He who understands it

Earns it.

He who doesn’t

Pays it.

--Albert Einstein(Financial Genius)

Compound Interest

Payment35%

Amount Owed30%

Length of Credit History

15%

New Credit10%

Types of Credit Used10%

Credit Scores

A+ABCDF

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780 – 850 720 – 779660 – 719 560 – 659 500 – 559 300 – 499

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