Credit Essentials Masterclass - Learn how credit affects all aspects of your life. | Donald Fittsgill Jr | Skillshare

Credit Essentials Masterclass - Learn how credit affects all aspects of your life.

Donald Fittsgill Jr, Podcast Doc | www.podcastdoc.com

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11 Lessons (22m)
    • 1. Running credit checks with no shame trailer

      0:34
    • 2. Financial Foundation Introduction

      1:13
    • 3. Running credit checks with no shame introduction

      2:16
    • 4. Running credit checks with no shame overview

      0:14
    • 5. How to build a great credit score

      5:02
    • 6. How to build a great credit score - Knowledge check

      2:52
    • 7. How to build a great credit score summary

      0:34
    • 8. How to avoid the traps and pitfalls of credit introduction

      0:30
    • 9. How to avoid the traps and pitfalls of credit

      5:30
    • 10. How to avoid the traps and pitfalls of credit - Knowledge check

      2:31
    • 11. How to avoid the traps and pitfalls of credit summary

      0:44

About This Class

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Running credit checks with no shame

Running credit checks with no shame is one course, in a 3-course series called Financial Foundation. Financial Foundation is designed to empower you with the knowledge and confidence you need to take control of your financial life.

In this course you'll learn,

  • How to build a great credit score
  • How to avoid the credit pitfalls and traps

We use instructional design theory to shape our courses in such a way that information can be retained and put into action.

This course is made for beginners but can be utilized by anyone seeking to gain knowledge in personal finance.

Transcripts

1. Running credit checks with no shame trailer: 2. Financial Foundation Introduction: let me ask you a few questions. Do you want to work for the rest of your life? Do you want to pay more for a car than someone else? Do you want to live paycheck to paycheck? If you're like most people, you answered a resounding no to those questions as you should. But the real question is how? How do you give yourself the best possible chance to live the life you want Free from financial stress? The answer is simple. Make good decisions. Make the decisions. You should know that the financial decisions that you make as an adult can and will affect you for a very long time. Unfortunately, many adults have to learn these lessons the hard way. And honestly, some never learn. But here's some good news. You don't have to learn the hard way. By taking this course, you are giving yourself a financial foundation that takes many people years to learn. Now, just like most things in life, you will get out of this scores what you put into this horse. I'm going to say that again. You will get out of this course what you put into this course, so pay attention and get ready to change your life. Let's go 3. Running credit checks with no shame introduction: Well, let's see. In college, I thought had everything figured out. I had a part time job and a full class load, so, needless to say, I was a pretty busy girl. Then one day I just started receiving credit cards in the mail. Crazy. I know. All I had to do was call the number on the credit card, and I had instant access to money. I was a finance major at the time, so I thought to myself, Hey, having credit cards can be a good thing. I mean, as long as I pay my bills on time, I have nothing to worry about, right? And I can honestly say that for the first year that I had credit cards, I did really well. So well, in fact, that I decided to get more credit cards from everywhere. I had so many accounts, but it still wasn't a problem because I was able to pay the minimum payment each month and therefore all was well until it wasn't. Let's just say that calamity struck and I was forced between paying rent or paying my Gap credit card. When times get tough, you got to do what you got to do to survive, right? Well, that's what I did. And eventually all of those credit cards I had were sent to collections. Uh, I was so disappointed with myself, but little did I know that the worst was yet to come. Reality set in. Once I graduated, I got my first job at the securities brokerage and then quickly found out that before I could get licensed to get my Siri's seven, I had to fix my credit. Can you imagine the embarrassment and pain I felt? I mean, I was a finance major with bad credit, which meant that I could not be trusted with other people's money. And things didn't get any easier. When I tried to get an apartment, I had to find a place that would accept someone with bad credit just to rent an apartment. And I have always paid my rent on time, but it turns out none of that mattered. As for a car, there were plenty of places that would sell me a car at literally the highest interest rate that they could legally charge. I cried thinking about how my poor credit decisions were affecting every aspect of my life . I mean, it's messed up when you think about it. The people who are most likely to not be able to afford something are charged more than the people that are most likely to be able to afford something. But in the end, no one put a gun to my head and made me get credit cards. I did it to myself. I did it to myself. 4. Running credit checks with no shame overview: in this section, you'll learn how to build a great credit score and how to avoid the traps and pitfalls of credit. So do yourself a favor and pay attention and get ready for running credit checks with no shame. Let's go. 5. How to build a great credit score: So after I had my run in with credit cards and literally ruined my life, I decided maybe I should find out more about this whole credit thing. I mean, take my friend Maggie. Maggie and I have been friends since we were 13 years old. We went to the same college. We both majored in finance, and we both got credit cards. But unlike me, Maggie stopped with one credit card, always paid her bill on time and never overextended herself. She's always been the responsible one, and now she gets to reach the rewards she just financed. A car was 0% interest rate. 0%. Meanwhile, I'm paying 19% for the same car, which basically means I'm paying a lot more money for the same car. So I decided it was time for me to stop complaining and start doing something to change my situation. I decided today that I will take control of my credit and never put myself in the situation again. I mean, if Maggie can do it, so can I. Your credit score is the numerical expression of your credit worthiness said differently. Your credit score represents the likelihood that you will repay debts on time. This score can affect many different aspects of your life. Not only can your credit score affect your ability to obtain new credit, it can affect your ability to get a job, your ability to rent an apartment and can even affect your ability to get a bank accounts. Imagine getting rejected trying to open a checking accounts not cool at all. But fortunately, this is a problem that is completely avoidable. Before you build a great credit score, you need to know what makes up a credit score. One of the most commonly used credit scores is your FICO score. Your FICO credit scores made up of five components payments, history amounts owed, length of credit history, new credit and credit mix. 35% of your credit score is made up of your payment. History. Credit cards, retail accounts, installment loans and mortgage loans could all be considered for payment history. Some serious events that negatively affect your payment history are bankruptcies, foreclosures, lawsuits, wage attachments and leans late or missed payments. And things that are sent to collections are considered negative events as well. Keep in mind that a greater weight is placed on amounts that are larger and more recent. Of course, if you pay all of your bills on time, then you can ensure that the payment history portion of your credit score will be a Sias possible. 30% of your credit score is made up of amounts owed. Once of importance in this section is the percentage of credit that is being used. Using a high percentage of your available credit means you're close to maxing out, and when you're close to maxing out your credit, your FICO score will be negatively impacted. So while it may seem counterintuitive, it is better to use a smaller percentage of your available credit than to max out your credit card, even if you pay it off each month. 15% of your credit score is made up of the length of your credit history. This is pretty straightforward. In general. Along their credit, history will increase your FICO score. 10% of your credit score is made up of new credit. Opening several new accounts in a short period of time can negatively affect this section of your credit score. Also, while enquiries can affect your score, it shouldn't affect it very much. In fact, many types of enquiries are ignored completely, and the score allows for rate shopping in general. Keep in mind it is not a good thing to open many new credit accounts in a short period of time. And finally, 10% of your credit score is made up of your credit mix. Your credit mix refers to your mix of credit cards, retail accounts and installment accounts. Keep in mind it's not necessary to open up all of these, and it's not a good idea to open up credit accounts that you don't intend to use. The credit mix simply shows the different types of credit you have experience with. Building a great credit score involves combining all five of these factors together and making it happen. If you're not prepared to rock all five areas, then guess what you are not prepared to get. Credit Credit is a serious game, and no credit is better than having bad credit. And regardless of what your credit situation is, you should check your credit at least once a year. Every year I'll give the website and the takeaways at the end of this course. It doesn't hurt your score when you check your own credit, and when you're checking your credit, you should check to see if there are any credit accounts that you don't recognize. If you do notice something on your credit that is unfamiliar, you should report the accounts as fraudulent to each credit bureau where it is shown. Keep in mind you don't need tohave credit ever. The only reason you ever need to have credit is if you plan on borrowing money one day, you can make it through your life without ever borrowing money. If you pay cash for everything, got it. 6. How to build a great credit score - Knowledge check: Okay, let's answer a few questions on how to build a great credit score. What percentage of your credit score is made up of amounts owed? Is it a 35% me 30% C, 25% de 10% bone bone, bone bone bone bone bone bone bone bone bone bum bum bum abobo bone bone bone bone bone bone, bone bone, bone bone, Boehm bone bow You were so good. A greater weight is placed on credit events that are blank and blank. Is it a older, smaller? Me newer, smaller See older, larger de newer larger bone bone bone bone bone bone bone bone bone bone, bone bone bom bom abobo bone bone, bone, bone, bone, bone, bone, bone, bone, bone, bone, bone. Boehm won't bow. There is a greater weight placed on credit events that are larger and more recent. Your FICO credit score is positively affected when you open several new credit accounts in a short period of time. A true be false boom boom boom boom boom boom bone bone bone bone bone bom bom abobo, bone bone, bone, bone, bone, bone, bone, bone, bone, bone, bone, bone, Boehm bone bow your credit score is negatively affected when you open several new credit accounts in a short period of time. Your FICO credit score can be hurt even if you pay your bills on time. A true be false bone bone bone bone bone bone bone bone bone bone bone bone bom bom bobo bobo bone bone bone, bone bone, bone phone, mobile phone foam Boehm bone bow Your FICO score is made up of five elements. Those elements are payment history, amounts owed, length of credit history, new accounts and credit mix. Paying your bill on time on Lee effects your payment history. 7. How to build a great credit score summary: Congratulations. You have just completed the how to build a great credit score section. Here are the takeaways. Your credit score is a numerical expression of your credit worthiness. Your FICO credit score is made of five components. Payment History amounts, oh, length of credit history, new credits, credit mix. You can check your credit reports on www dot annual credit report dot com. 8. How to avoid the traps and pitfalls of credit introduction: So now that I know how to build a great credit score, I want to do my absolute best to not get myself in this situation again. Get a payday loan. Is that a good alternative? And what do I do if I need a car but don't have the cash to pay for one outright dry pay a high interest rate just to drive? I really want to do my absolute best to never get into credit trouble again. Really, I dio It would be awesome if someone could just tell me, what are the credit traps that people get into and how do I avoid them? Does that make sense? 9. How to avoid the traps and pitfalls of credit: So at this point, we know how to build a great credit score. So how do we avoid the credit pitfalls in traps that come along with everyday life? First of all, as I stated before, credit is a serious game, and having no credit is better than having bad credit. So here are 10 tips that you can use to avoid the credit pitfalls and traps. Number one. Stay away from payday loans. Most payday lenders charge you a specific dollar amount per every $100 Borrowed payday lenders are also notorious for adding on additional fees for transaction costs. Let's assume you take out a $500 loan. This loan will generally charge about $20 per $100 which means in two weeks you now need $600 to close out your $500 loan. If the loan is extended past the two week period, you Oh, another $100 bringing your total pay back amount to $700. As you can probably tell this congee out of control very quickly. What tends to happen to a lot of people is that if circumstances don't change, you end up having to take out another payday loan to resolve your current payday loan. This is a vicious cycle that is very difficult to escape from. This is great for the payday loan company, but horrible for the borrower. So much so that some states in the United States don't even permit the practice of providing payday loans because they view it as predatory lending. In addition to being extremely costly, obtaining payday loans also damages your credit score number to stay away from any court lock that requires you to finance a car with them. These types of court lots are prevalent, especially in low income neighborhoods. These car lots will only finance a car to you and will not sell it to you flat out. These places usually want to lock you into, ah, high interest rate, claiming that they're doing you a service. What they're doing is patting their bottom line, which is their right. But you also have a right to take your business elsewhere, and I suggest you do so. Number three. Avoid Onley paying the minimum amounts on your credit card. In most cases, paying the minimum amounts on your credit cards will never pay off the balance. In fact, due to the interest rates that are charged, your balances could actually increase. You should always seek to pay the largest payment that you can afford. Remember, interest rates are only good for the lender, not the borrower. Number four. Never borrow money for a want. This kind of speaks for itself. You shouldn't borrow money for something that you want. You should save your money to buy something that you want. Keep your credit purchases to needs and not wants, and you'll be much better off number five. Avoid borrowing more student loans than necessary to pay for school. For some students. Loans air necessary to go to school. As the borrower, you will have the ability to request various amounts of money for school financing. When you request in amount of money that exceeds your tuition, then you receive a refund check. Make no mistake about it. Student loans can add up very quickly, and they can take you a very long time to pay off. Do yourself a favor and be mindful of the amount of student loans you borrow And remember, you can always return your refund check Number six. Avoid car title loans. Not only do these loans typically come with very high interest rates, they typically have a large balloon payment at the end of the loan. If you miss a payment or can't make a payment, guess what happens. You lose your car now. You don't have money or transportation. You should avoid car title loans at all costs. Number seven. Avoid rent to own while renting to own it first. Sounds like a great idea. It's really one of the worst ways to pay for something when you rent to own, you were paying weekly. Instead of paying for something outright, you're lured in with small weekly payments for several years. In the end, these payments add apps way more than you would have paid if you would have bought the item outright. Do you want to pay $800 for a television? Where do you want to pay $1500 for the same television? Not a trick question. Number eight. Don't buy Moorhouse than you can afford this things like an easy one until you decide to buy a house, you'll think that you found your perfect house until you decide to take an innocent look at a house that is just outside of your budgets. That's when things can start to go awry and you'll convince yourself that you can't live without the MAWR. Expensive house. Don't let anyone convince you to spend more money than you want to spend for a house. When buying a house, there will be three different prices floating around the budget. You set the budget, your mortgage broker sets and the cost for the house you want. The safest decision is to go with the lowest number. Number nine. Avoid high interest credit cards. Typically, these credit cards are offered to people that are rebuilding their credit. It's never a good idea to pay a lot of money to borrow. There are better ways to get things that you want and number 10 never max out a credit card as we talked about before. You can hurt your credit score even if you pay your bill on time. 30% of your FICO credit score is attributable to amounts owed. If you max out your credit cards, you'll be pegged as having high revolving balances. Having high revolving balances will negatively affect your FICO credit score 10. How to avoid the traps and pitfalls of credit - Knowledge check: Okay. Now let's answer some questions on how to avoid the traps and pitfalls of credit. Borrowing money to take a vacation is a good thing. A true be false bone bone bone bone bone bone bone boom boom boom boom bom bom abobo bone bone, bone, bone, bone, bone, bone, bone, bone, bone bone Boehm bone bowl It is not a good thing. Tomorrow money for something you want. You should save your money for things you want. Payday loans are good if I don't have any money. A true be false bone bone, bone, bone, bone, bone, bone, bone, bone bone bum bum bum bum abobo bone bone, bone bone bone bone bone bone, bone bone bone bone. Rome Bone bow Payday loans can land you in a vicious cycle that is very hard to escape. High interest rates are good for the lender. A true be false bone bone, bone, bone, bone, bone, bone, bone, bone, bone, bone bone, bum bum abobo, bone bone, bone, bone, bone, bone bone, Bumbo, bone bone, Boehm bone bow. High interest rates are great for the lender and bad for the borrower. You must keep your student loan refund check to use on school expenses. A true be false bone bone bone bone bone bone bone bone bone bone bone bone bom bom abobo bone bone, bone bone bone bone, bone phone, bobo phone phone. Boehm bone bow. You can keep your student loan refund check to use on school expenses or anything else you want. You can also return your student loan check. You should receive instructions included with your check on how this is done. 11. How to avoid the traps and pitfalls of credit summary: Congratulations. You have just completed the how to avoid the traps and pitfalls of credit section. Here are the takeaways. Stay away from payday loans. Stay away from any car lack that requires you to finance a car with them. Avoid only paying the minimum amount on your credit card. Never borrow money for a warrant. Avoid borrowing more student loans than necessary to pay for school. Avoid car title loans. Avoid rent to own. Don't buy Moorhouse than you can afford. Avoid high interest credit cards. Never Max out a credit card.