Consumer Credit Basics

Use credit wisely to enjoy personal financial health.

Consumer Credit Basics

• The benefits and costs of using credit

• Basics concepts in consumer lending

• Credit scores

• Using credit wisely

Use Credit Wisely

• Build credit• Big items; house, car, college• Convenient & safe• Emergencies

Use Credit Wisely

• Easy to live beyond your means• Easy to get into credit trouble• Hard to get loans for big items or

emergencies with bad credit

Credit 101

Installment or Revolving

Secured or Unsecured

Credit 101

Installment or Revolving

Secured or Unsecured

The 3 C’s of Credit:

1. Capacity2. Capital3. Character

Credit 101

Installment or Revolving

Secured or Unsecured

The 3 C’s of Credit:

1. Capacity2. Capital3. Character

Credit Score

Credit Score

Payment History35%

Amount Owed30%

Length of history15%

Types of credit10%

New credit10%

Credit Score

Payment History35%

Amount Owed30%

Length of history15%

Types of credit10%

New credit10%

Credit Score

Payment History35%

Amount Owed30%

Length of history15%

Types of credit10%

New credit10%

Use Credit Wisely

• Pay on time• Pay in full or more than minimum• Evaluate purchases• Avoid fraud

Use Credit Wisely

• Pay on time• Pay in full or more than minimum• Evaluate purchases• Avoid Fraud

•Over limit fees•Convenience fees/interest•Cash advance

Credit Help

• Communicate with lenders• Talk to a financial counselor• Work out a budget• Prioritize debts

MCUL Financial Education

• MCUL Consumer Financial Education Library

• Financial Health course

• Lovemycreditunion.org

• CU Village Financial Resource Center