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
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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. Capacity
2. Capital
3. Character
Credit 101
Installment or
Revolving
Secured or
Unsecured
The 3 C’s of Credit:
1. Capacity
2. Capital
3. Character
Credit Score
Credit Score
New credit
10%
Types of credit
10%
Length of history
15%
Amount Owed
30%
Payment History
35%
Credit Score
New credit
10%
Types of credit
10%
Payment History
35%
Length of history
15%
Amount Owed
30%
Credit Score
New credit
10%
Types of credit
10%
Payment History
35%
Length of history
15%
Amount Owed
30%
Use Credit Wisely
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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
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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