Financial Literacy Workshop – Credit Scores and Reports

As a young adult, money management is a skill I am not particularly familiar with; thankfully, Moorpark College provides a resource to learn! Jay Doniaz with Ventura County Credit Union presented at this event.

Ventura County Credit Union Logo

Notes

Good Vs. Bad Debt:

  • There are many different types of debt; some can be beneficial, while others can hurt you if you don’t manage them wisely. All debt carries some level of risk, and each as its advantages and disadvantages.
  • Good debt: student, home, car, consumer CAN be (depends on situation)
  • Bad debt: credit card, payday
    • Credit card debt can build quickly and fast
    • Homes will accure value, equity
    • Student debt is investing in yourself
    • payday loans: emergency loans, not large & easy to get, high rate -350-500% !!!!

Paycheck to paycheck –> the interest rate will keep the loan high and growing at a rate the person will be unable to keep up with.

Strategies To Build Credit:

  • Open a line of credit
  • Request that your payment history be reported
  • open a joint account (optional)
  • Pay all your bills on time and in full. Never miss a payment!

When making loan decisions, Borrowers can look for:

  • Early payment penalties
  • Annual fees
  • ease of payment
  • when a credit check will be done
  • repayment terms
  • annual percentage rates (APR)

What is a Credit Report?

  • Your credit report is a snapshot of a credit profile, including your credit history
  • Credit reports help lendrs, such as financial institutions, understand how creditworthy you are– that is, whether you’re likely to repay a loan if given onne.
  • The 3 credit bureaus: Equifax, Experian, and TransUnion

Accessing your credit report and score:

  • You can get one free credit report per year from annual credit report
  • www.annualcreditreport.com
  • You can also get a free credit report in case of reported fraud, if you need to apply for welfare, or if you are denied a loan or credit application.

Reading Your Credit Report

  • Public Records: lawsuits, bankruptcies, judgements, delinquent, or unpaid taxes
  • Personal Information: Name, birthdate, SSN, address, name of spouse/employer
  • Credit Accounts: Debt status, open/closed accounts
  • Credit Inquiries: Organizations(…)

Strategies to Optimize Credit

Why scores go down: late payments!!, collections, bankruptcies, high debt compared to income, too many credit inquiries within the past year, charge-offs/sever delinquency (when the lender doesn’t receive payment after several months and the lender has to take a loss), using most of your available credit or maxing out your cards

Improving your credit: Use less than 30% of your available credit, do not max out your credit cards, pay your bills on time (and in full, if possible), do not take on too much debt, create a follow a monthly budget, review and understand your credit report for accuracy (make written inquiries on items you believe are incorrect), get credit counseling, consider financial products

Other notes:

  • Gross is before taxes and net is after taxes
  • Not For Profit –> lowest rate for a loan

Questions? –> CS@vccuonline.met
march 11 next webinar/workshop: using credit cards responsibly

Final Thoughts

Thank you to Moorpark College and the speaker, Jay Doniaz for this wonderful experience. Thank you for reading!