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Stock Market Analysis and
Personal Finance
Mr. Bernstein
Building and Protecting Credit
March 2017
Stock Market Analysis
& Personal Finance
Mr. Bernstein
The 5 C’s of Credit
Character – Local lenders may know you or your
cosigners
Capacity – What is your current debt
payment/income ratio?
Capital – What is your current debt/asset ratio?
Collateral
Credit History
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Stock Market Analysis
& Personal Finance
If you’ve never had a credit card or a loan, your credit history is
Mr. Bernstein
Building Credit
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Stock Market Analysis
& Personal Finance
Mr. Bernstein
Building Credit
1. Start with a secure credit card
Collateralized credit card activity is reported to the
credit bureaus
2. VERY IMPORTANT: Only charge what you can
pay in full
You are essentially receiving a no-interest loan…the
retailer pays the bank, not you…
keep it that way!
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Stock Market Analysis
& Personal Finance
Mr. Bernstein
Building Credit
3. Pay On Time
Watch that grace period closely!
Even one late payment hurts your credit score,
especially when you have little history
4. Avoid Applying for Multiple Cards
Every application produces a small hit to your
credit score…Prove you can handle one card first
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Stock Market Analysis
& Personal Finance
Mr. Bernstein
Building Credit
5. Check Your Progress
Federal law requires credit reporting firms to provide
consumers free credit reports (1 per year per bureau)
A modest fee is typically required to receive an actual credit
score
http://www.annualcreditreport.com is sponsored by the
three largest credit reporting firms, Equifax, TransUnion
and Experian
Checking your report does not your score but a check from
lenders does create a small hit to your score… Why?
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Stock Market Analysis
& Personal Finance
Mr. Bernstein
Building Credit
6. After One Year, Apply for Unsecured Card
The unsecured card will likely offer a higher
credit limit and better pricing
Eventually add a card from a retailer
Continue to pay in full each month
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Stock Market Analysis
& Personal Finance
Mr. Bernstein
Credit Scores
It is illegal for lenders to deny credit if you are creditworthy
There are deadlines for requesting credit scores and
challenging loan denials
Credit file typically goes back seven years (unless loan is for
larger sums of money)
Bankruptcy information goes back ten years
Employers may check Credit Scores as well as lenders
Auto insurance rates consider Credit Scores*
Income is not considered… Why?
* - Consumer Reports, Sept. 2015 8
Stock Market Analysis
& Personal Finance
Mr. Bernstein
Cosigning
You are essentially doing what the lender does not
want to do – accepting the credit risk of another
They get paid for taking credit risk and don’t want
this one
Think long and hard before cosigning – how much
cash are you willing to pay to avoid damaging a
relationship?
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Stock Market Analysis
& Personal Finance
Mr. Bernstein
Identity Theft
Check your monthly statements
Notify creditor immediately of unauthorized card use
New York Times collection of identity theft stories:
http://topics.nytimes.com/your-money/credit/identitytheft/index.html?offset=0&s=newest
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