Slide 1
Credit
Slide 2
Agenda
Topic one
Topic two
Topic three
Topic four
Topic five
Slide 3
What is Credit?
Definition:
Credit is the ability to borrow money or access goods and services with the promise to pay later.
It is based on the trust that payment will be made in the future.
Credit allows consumers to purchase items now and pay for them over time.
Credit can come in various forms such as credit cards, loans, and mortgages.
Slide 4
Facts & Statistics about Credit in the U.S.
80% of Americans have some form of credit.
The average American credit score is 711.
As of 2023, the total U.S. credit card debt reached over $1 trillion.
Approximately 30% of Americans have a credit score below 600, which is considered “bad credit.”
1 in 5 consumers have at least one error on their credit report.
66% of credit report disputes result in successful resolutions, meaning errors are corrected.
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Slide 5
Why Is Credit important?
Access to Financial Opportunities: Credit allows access to loans, mortgages, and financing options.
Build Trustworthiness: A good credit score shows lenders that you are a responsible borrower.
Interest Rates: Good credit scores lead to lower interest rates, saving money on loans.
Emergency Situations: Having credit can help during unexpected financial emergencies.
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Slide 6
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__ | CREDIT SCORE
What is a good score?
Best Credit: 800 - 850
750 587 640
350
Excellent Credit: 750 - 799
485
© Good Credit: 700 - 749
oa
380 525 5
Fair Credit: 650 - 699
664
Poor Credit: 600 - 649
850 63] © «
Bad Credit: 300 - 599
850 - 300 = 550 points that are available to build
your credit score
Econ
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Slide 7
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WHOLE SCORE
‘Amount of Debt
30;
We address all 5 factors
e Payment History = 192.5 max points
© Credit Utilization = 165 max points
FICOSCORE
The score lenders use:
Sat,
¢ Credit History = 82.5 max points
@ New Credit = 55 max points
Payment History
35;
10
New Credit
© Credit Mix = 55 max points
Credit Mix
Econ
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Slide 8
Payment history (35%)
Debt Validation Letter
Requests proof that a debt is valid and that they have the right to collect it. Under the Fair Debt Collection Practices Act (FDCPA), creditors must provide verification of the debt.
Method of Verification Letter
Requests the method a creditor used to verify a debt reported on your credit report. It can be used when the creditor has not provided sufficient evidence or verification of the debt.
Violation of FCRA Rights Letter
Sent when a consumer believes their rights under the Fair Credit Reporting Act (FCRA) have been violated. For example, if a credit bureau fails to investigate a dispute or fails to correct inaccurate information.
Intent to Litigate Letter
A formal notice to a creditor, collection agency, or credit bureau stating your intention to take legal action if the disputed debt is not resolved or if violations of your rights are not corrected.
Slide 9
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CREDIT HISTORY
Solution: Authorized User
to your Accou
1
Find a relative or friend with a
credit card with good history
fe
2. Asked to be added to their
account as a authorized user
—————
Card owner does not have to give you a
card. You will inherit their payment history.
Econ !
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Slide 10
Credit utilization
Debt Elimination
Increase Credit Limit
New Credit
Slide 11
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NEW CREDIT
Solution: Adding Tradelines
1
Deparment Siers-Cards
Secured Credit Cards
Fre
a
Rental History
=
Ko
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Credit Builder Loan
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Credit Builder loan helps you build
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your credit and emergency fund
simultaneously.
Econ
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Slide 12
Building Credit
📌 Secured Credit Cards
Requires a cash deposit as collateral (usually your credit limit).
Works like a regular credit card, helping to build credit with responsible use.
Payments are reported to credit bureaus, boosting credit score over time.
Ideal for those with no credit or bad credit.
📌 Credit Builder Loans
A loan where the borrowed amount is held in a bank account until fully paid off.
Payments are reported to credit bureaus, establishing positive credit history.
No upfront money needed—good for first-time borrowers.
At the end of the loan term, you receive the saved-up money.
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Slide 13
How to Build Credit
Make all payments on time.
Keep your credit card or line of credit balances (utilization) low
Avoid opening too many new accounts at once
Keep accounts open for as long as possible
Check each of your credit reports often for errors and discrepancies.
Avoid using credit cards as an emergency fund
Pay your balance down to zero monthly
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Slide 14
Credit Bureaus – Record Keepers
There are 3 major credit bureaus:
Equifax
TransUnion
Experian
*You can obtain a free copy of your credit report at annualcreditreport.com
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Slide 15
Thank you
Tiffany Cogdell
919-373-5105
thatmakescents.me
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