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Slide Notes

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Credit score

Published on Mar 18, 2016

Basic presentation about Credit Score.

PRESENTATION OUTLINE

Credit score

A Breakdown of Your Credit Score

Before Credit score

  • No standard for mesuring risks
  • Up to individual lenders to judge loan applicants.
Photo by CIMMYT

What is a credit score?

Photo by GotCredit

A credit scrore

  • is a number used by fianacial institutions and credit card companies to determine risk level when issuing you loan or a credit card.

FICO

  • Is the most widely credit score model used in north America.
  • It was introduced in 1989 by Fair, Isaac and Company.
  • This Company is now called Fair Isaac Company
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The Credit score Companies

  • Equifax
  • Transunion
  • Experian
Photo by GotCredit

Since every company has its own formula, your FICO score can vary depending on which bureau supplies the information

Photo by el tio cachi2

Most credit scores are between 350 and 800

A low score means you could be denied a loan or a credit card

You might get a credit card or a loan approved but a higher interest rate

Loan and credit card approval at best rates :)

Why does it matter?

It matters

  • Renting an appartment
  • Student loans
  • Car payments
  • Job Applications
Photo by Bods

How is it calculated?

Photo by Dave Dugdale

The Breakdown of Credit Score

Payment History

  • 35% Payment history: making payments on time boosts your credit score.
Photo by jurvetson

Capacity

  • 30% Capacity includes
  • How much of your available credit do you use
  • The less you use the better
  • Maxing out your lines of credit actually hurts your credit score
Photo by thebarrowboy

Length of Credit

  • 15% Length of Credit : A long History of good credit habits raises your score.
Photo by liewcf

New Credit

  • 10% New credit :
  • Opening a bunch of credit lines on a short period of times can hurt your credit score
  • Uncludes retail cards
Photo by dustinsapenga

Mix Credit

  • 10% revolving credit
  • Includes credit cards installment, mortgage, etc.
Photo by eric731

Keep Track of Credit Score

Photo by HKmPUA

Keep On Top

  • You can request one credit score per year from each one of the major credit bureaus.
  • Space your requests
  • Use Credit Karma

Untitled Slide

Good Advice

  • Be a good muslim.
  • Pay on time
  • Only buy what you can afford
  • Use commun sens