lesson how do you establish a positive credit history? protecting your credit 18.2
TRANSCRIPT
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LESSON
How do you establish a positive credit history?
Protecting Your Credit18.2
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ADDITIONAL EXAMPLE 1Credit histories for Pietra and Gracie are given below. One received a credit score of 750 and one received a 425. Match the person with the score.
Pietra: 750Gracie: 425
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18.2 LESSON QUIZ
Reeni has applied for a bank loan. Each statement below tells something about her credit history. Decide if each statement is a positive or negative factor and how it might affect the approval of a loan.
Negative; she will possibly make late payments.
1.
pays credit card monthly but often pays latea.
6.14.D
Positive; she fulfilled a loan obligation.
has finished repaying all student loansb.
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Reeni has applied for a bank loan. Each statement below tells something about her credit history. Decide if each statement is a positive or negative factor and how it might affect the approval of a loan.
Positive; she has job security.
1.
has been at the same job for 10 yearsc.
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Analyze the two credit histories below. Then match the credit scores of 740 and 610 to the histories.
History A: 740
2.
History A: Monthly income: $3,100. Credit card balance: $0. Car loan payment: $240. No late payments.
History B: 610
History B: Monthly income: $2,400. Credit card balance: $0. Car loan payment: $220. Credit card payment: $52. Two late car payments.
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Find the debt-to-income ratio for History B.3.
about 11.3%
Which person in Exercise 2 would most likely get a car loan? Explain.
4.
The person with History A. This person has the higher credit score and is considered the lower risk for a loan.
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Enlarge the net of the octahedron below. Ask students to fill each triangle with information or characteristics that would give a good credit history and/or a high credit score. Then have them cut out the net and tape it together to form an octahedron. Have them compare their octahedrons with those of other students.
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How do you establish a positive credit history?
Sample answer:
Pay all of your bills on time, including loan payments. Do not keep a high credit card or loan balance. Answer all questions on a credit application honestly.