Student WorkbookTo Your Credit

Use the space below to take notes on what you want to remember and

what you want to share with others.

Extra Resources: Practical Money Skills – Check out the sections on credit and debt. Review the sections on buying a car and a house, too! http://www.practicalmoneyskills.com/learn

Better Money Habits – Check out the sections on credit, debt, home ownership, and auto. https://bettermoneyhabits.bankofamerica.com/en

Updated 11.7.19 1

Fill in the key terms.

Credit is: __________ that is __________ to you __________ __________ with __________ when payments are made over time a way to __________ now and _________ later

Draw a line to connect each vocabulary term with the correct definition.

Available

Credit

Grace

Period

APR

Late

Payment Fee

Annual rate that is

charged for borrowing

The amount of credit

you have to spend

The fee charged if the

minimum payment is made

after the due date

The number of days

between the statement date

and the payment due date

2

08/01/18

If you would like more information about credit counseling services, call 1-800-555-5555.

1

2

3407/09/18

08/01/18

06/1306/1206/11 06/11

08/01/18

Paying more than the minimum

saves money in the long run!

3

Compare the offers below to determine which is best and why. Circle which card has the best feature for each category to help guide your decision. The card that

has the most items circled will be the card with the best offer.

4

Fill in the key terms.

5

4

Sample Credit Report Credit Reporting Agency

Business Address City, State, 00000

Personal Identification Information

Your Name Social Security #: 123-45-6789 123 Current Address Date of Birth: May 1, 1970 City, State 00000

Previous Address(es) Last Reported Employment: 456 Old Address, City, State 00000 Accountant, Accounting Firm 789 Older Address, City, State 00000

Public Record Information

Bankruptcy Filed 12/95; Milwaukee County; Case ID 765432; Liabilities-$25,200; Personal; Individual; Discharges; Assets-$750

Satisfied Judgment Filed 07/91; Dane County; Case ID 234567; Defendant- Consumer; Amount-$9,342; Plaintiff-XYZ Real Estate; Satisfied 03/92; Verified 05/92

Collection Agency Account Information

Collection Agency (800) 111-1111 Collection Reported 05/97; Assigned 07/97 to Collection Agency; Client- Hospital; Amount-$1040; Paid collection account

Credit Account Information

Company Name

Account Number

Whose Acct.

Date Opened

Months Reviewed

Last Activity

High Credit

Terms Items as of Date Reported Date

Reported Balance Past Due Status

Dept Store

12345 I 4/92 36 9/97 $500 X $0 X O1 1/07

Payment History: 111111111111111111211111111111132211

Auto Finance

987654

I 7/94 48 7/98 $750

0 $300 $0 X I1 12/06

Payment History: 433232111111111111211111111111122211111111111111

Companies that Requested Your Credit File

12/30/06 Equifax-Disclosure 12/15/05 Department Store 10/02/06 Department Store 08/29/05 Credit Card Company 07/08/06 Bank

FICO Score

504

1

2

3

6

5

Payment History Key: 1 = Pays as agreed, 2 = 3059 days past the due date, 3 = 6089 days past the due date, 4 = 90119 days past the due date, 5 = 120 days or more past the due date, 07 = Paying or paid under a special agreement, 08 = Repossession

15

1203/13 05/13

05/17 07/17

04/08 01/18

12/17

04/11

07/11 07/15

12/30/1710/02/1707/08/17

08/29/1612/18/16

1986

6

What it all means:

Section 1: Basic identification information

Credit reports identify you using a number of pieces of information. These usually include: Your name and current address Social security number Previous addresses Date of birth Driver's license number Spouse's name

Section 2: Public records

This is where any bankruptcies or tax liens are listed. If you have any of these instances on your reports, you probably have poor credit and a low credit score.

Section 3: Collection agency information If you don’t pay your bills, a creditor may hire a collection agency to contact you and try to collect what you owe.

Section 4: Credit account records and payment history The reports will also have information about all of your credit accounts. Each credit account will be listed along with identifying information about the account, such as:

Date the account was opened The type of account (such as a loan or credit card) The limit on the credit account The current balance The minimum monthly payment Date the account was closed (if it is no longer active)

In addition, each credit account will show if you have been able to pay your bills in full and on time throughout the past five to seven years. Some reports include a simple statement about whether you're a good bill payer such as "always pays bills on time."

On the sample, note the series of numbers after “Payment History”: 1= Pays as agreed, 2= 3059days past the due date, 3= 6089 days past the due date, 4= 90119 days past the due date, 5= 120 days or more past the due date, 07= Paying or paid under a special agreement, 08= Repossession. This section may look different on reports from different agencies, but it will contain the same general info.

Section 5: Credit Inquiries There will be a list of inquires that have been made by credit companies about your credit history. This allows you to see who has been asking about your credit-worthiness. Credit companies tend to look for answers to specific questions, such as, "Do you pay your bills?" and "Have you ever filed for bankruptcy?" They will use this information to help determine how much credit, if any, they want to issue to you.

Section 6: Credit Score

You are entitled to receive one free credit report every 12 months from each of the three national consumer credit reporting companies: Equifax, Experian, and TransUnion

Visit annualcreditreport.com for your free credit report!

7

Fill in the credit scores below.

Fill in the percentages below.

8

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hat

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egat

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entr

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uses

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edit

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ory

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hat

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t?A.

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muc

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eep

payi

ng y

our b

ills a

nd lo

an p

aym

ents

on

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and

don’

tbo

rrow

mon

ey to

buy

thin

gs y

ou c

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affo

rd.

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y al

l bill

s on

time,

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er b

alan

ce fr

om m

onth

to m

onth

and

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cre

dit u

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you

have

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core

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r a m

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dit c

ard

with

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it. H

ave

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sco

llate

ral)

or a

pply

for a

n au

to lo

an (l

oan

wou

ld b

e se

cure

d by

you

r car

).

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to L

oans

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part

men

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or C

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ortg

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GO

DO

IT N

OW

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nanc

ial I

ssue

Be

st P

ract

ices

to H

elp

Man

age

Mon

ey R

espo

nsib

ly

My

Fina

ncia

l To

Do L

ist

Cred

it Ca

rds

W

hen

I hav

e an

y ty

pe o

f cre

dit c

ard,

I w

ill o

nly

buy

thin

gs I

can

affo

rd to

pay

for i

n fu

ll at

the

time

I mak

e th

e pu

rcha

se.

I u

nder

stan

d th

at u

sing

my

cred

it ca

rd to

buy

som

ethi

ng th

at I

will

nee

dto

pay

off

for m

onth

s or y

ears

will

kee

p m

e in

deb

t and

resu

lt in

me

payi

ngm

uch

mor

e th

an th

e ite

ms I

bou

ght a

ctua

lly c

ost.

Cred

it Sc

ore

I w

ill p

ay a

ll of

my

bills

and

any

loan

pay

men

ts I

have

on

time

and

in fu

ll.

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hen

I hav

e a

cred

it ca

rd I

will

pay

off

the

full

bala

nce

each

mon

th o

ntim

e. I

will

alw

ays p

ay m

ore

than

the

min

imum

requ

ired.

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ill n

ot a

pply

for m

ultip

le c

redi

t car

ds in

shor

t per

iods

of t

ime.

Cred

it Re

port

I c

heck

my

cred

it re

port

at A

nn

ual

Cre

dit

Rep

ort

.co

m a

t lea

st o

nce

each

year

. (O

nly

use

th

is s

ite!

Oth

ers

can

sca

m y

ou

an

d m

ake

yo

u p

ay

for

you

rre

po

rt.)

I w

ill a

ddre

ss a

ny p

robl

ems o

r ina

ccur

acie

s I fi

nd o

n m

y cr

edit

repo

rts

with

the

cred

it re

port

ing

agen

cies

.

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ing

a Go

od

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stor

y

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ill c

onsid

er th

e fo

llow

ing

whe

n I a

m fi

nanc

ially

read

y an

d re

spon

sible

to h

elp

build

a g

ood

cred

it hi

stor

y an

d sc

ore:

Ap

plyi

ng fo

r a st

ore

cred

it ca

rd a

nd u

sing

for p

erio

dic

purc

hase

s.

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ing

to m

y ba

nk o

r cre

dit u

nion

abo

ut o

peni

ng a

secu

re c

redi

t car

d.

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ing

to m

y ba

nk a

bout

app

lyin

g fo

r a m

ajor

cre

dit c

ard

with

a lo

wcr

edit

limit

and

havi

ng a

trus

twor

thy

co-s

igno

r age

21

or o

lder

app

ly w

ithm

e. (

Rem

emb

er, i

t is

a jo

int

acco

un

t so

if t

hey

use

th

e ca

rd a

nd

do

n’t

pay

off

th

eir

pu

rch

ase

s, it

aff

ects

yo

u.)

11