Lesson 1: Introduction & Fundamentals
Objective:
Understand the foundational concepts of credit scores, including what they are and why they are important.
Content:
– Definition: A credit score is a numerical representation of a person’s creditworthiness, based on an analysis of their credit history. It’s used by lenders to evaluate the risk of lending money or providing credit.
– Importance: Having a good credit score is essential for obtaining loans, credit cards, renting apartments, and even influencing certain job opportunities.
Resources:
– Article: [What is credit, a credit score, and a credit report?](www.principal.com/individuals/build-your-knowledge/what-credit-score-and-how-do-you-improve-yours)
– Video: [Credit Score 101 How to Improve Your Score Fast](https://www.youtube.com/watch?v=lqZULlYdUVw)
Key Takeaways:
– Credit scores range from 300 to 850; higher scores indicate better creditworthiness.
– Factors influencing credit scores include payment history, credit utilization, credit age, credit mix, and recent inquiries.
Activity:
Reflect on your current understanding of credit scores. Write down two areas where you’d like to improve your credit score based on what you’ve learned.
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Lesson 2: Practical Application & Techniques
Objective:
Learn practical strategies to apply for improving your credit score effectively.
Content:
– Build Credit Using Credit Cards: Understand how responsible credit card use can positively impact your credit score.
– Timely Payments: The importance of paying at least the minimum amount on credit cards and loans on time.
– Credit Utilization: Strategies to keep your credit utilization below 30% of your total available credit.
Resources:
– Video: [How to Properly Use a Credit Card](https://www.youtube.com/watch?v=TUPoH3BjrT0)
– Article: [How To Build Credit Using A Credit Card – Improve Credit Score 101](https://m.youtube.com/watch?v=nzbYMqZQ4yY&t=97s)
Key Takeaways:
– Regular, on-time payments are crucial for a good credit score.
– Keeping balances low and only applying for credit when necessary can help maintain or improve your score.
Activity:
Set a calendar reminder to review your credit card payments each month and analyze your current credit utilization.
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Lesson 3: Advanced Insights & Mastery
Objective:
Gain advanced insights into maintaining a high credit score and understand the nuances of credit management.
Content:
– Advanced Strategies: Explore how length of credit history and variety of credit types affect scores.
– Understanding Credit Reports: Learn how to read and interpret your credit report to spot inaccuracies and areas of opportunity.
– Avoiding Pitfalls: Recognize common mistakes that negatively impact credit scores (e.g., closing old accounts).
Resources:
– Video: [How to RAISE Your Credit Score Quickly (Guaranteed!)](https://www.youtube.com/watch?v=JNL7ZsfKD_4)
– Article: [How Long Does It Take To Improve Your Credit Score?](upsolve.org/learn/how-long-does-it-take-to-improve-your-credit-score/)
Key Takeaways:
– Regularly reviewing credit reports can help catch and address mistakes.
– A balanced mix of credit accounts, such as loans and credit cards, can enhance your credit profile.
Activity:
Obtain a free copy of your credit report and take notes on at least two areas where you can improve your credit health.
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Assessment
1. Which of the following factors is most important in determining your credit score?
– A) Length of credit history
– B) Payment history
– C) Credit inquiries
– D) Types of credit
– Answer: B) Payment history
2. What percentage should you aim to keep your credit utilization below?
– A) 50%
– B) 20%
– C) 30%
– D) 10%
– Answer: C) 30%
3. Why is it important to maintain old credit accounts?
– A) They increase credit utilization
– B) They improve credit mix
– C) They provide historical data that can improve credit age
– D) They reduce total debt
– Answer: C) They provide historical data that can improve credit age
4. What should you do if you find an error on your credit report?
– A) Ignore it, as it has no effect
– B) Report it to the credit bureau immediately
– C) Wait to see if it gets corrected automatically
– D) Apply for more credit to counterbalance
– Answer: B) Report it to the credit bureau immediately
