Managing Credit Mansfield University trio melissa Wise First Citizens National Bank

Managing Credit Mansfield University TRiO

Melissa Wise

-First Citizens National Bank

Credit TOPICS

• Credit
• Credit Scores
• Using Credit Wisely
• Credit Cards
• Credit Programs

According to Citibank, “There are presently 5 to 7 million Americans who are financially overextended.”

• According to Citibank, “There are presently 5 to 7 million Americans who are financially overextended.”

WHAT IS CREDIT?

• Credit is when goods, services, or money is received in exchange for a promise to pay a definite sum of money at a future date.

CREDIT

• ADVANTAGES
• Convenient
• Useful for emergencies
• Often required to hold a reservation
• Ability to purchase expensive items sooner
• Eliminates the need to carry large amounts of cash

• DISADVANTAGES
• Paying interest
• Additional fees are common
• Temptation to overspend
• Can cause large amounts of debt
• Identity theft

CREDIT SCORES

• What is a credit score or FICO® score?
• A prediction of how likely you are to pay your bills
• A number between 300 and 850 derived from many different factors
• A number that drives the approval of credit extensions and the interest rate you pay on those extensions

CREDIT SCORE KEY FACTORS

• The FICO® scoring model looks at more than 20 factors in five categories.
• How you pay your bills (35%)
• Amount of money you owe and the amount of available credit (30%)
• Length of credit history (15%)
• Mix of credit (10%)
• New credit applications (10%)

RANGE OF CREDIT SCORES

• The following are some basic guidelines for interpreting a credit score:
• 620 and below – Poor credit
• 621-690 – Fair credit
• 691-720 – Good credit
• 721-750 – Good to excellent credit
• 751-800 – Excellent credit
• 801 and above – Nearly perfect credit