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GLOBAL
FINANCE SERIES
GLOBAL
FINANCE SERIES
Powered by Financial Literacy HQ &
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Powered by Financial Literacy HQ &
Español Sin Fronteras
Module 4: CREDITModule 4: CREDIT
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Borrowing money now,
Paying it back later
What is Credit?What is Credit?
Credit impacts major parts of your life:
getting approved for loans - car, college,
business
renting an apartment or housing
qualifying for better interest rates
job applications
Credit is your financial reputation
Why Credit Matters
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Types of Credit
Loans ⟶ fixed
payments over time
Credit Cars ⟶
revolving credit
Buy now, pay later
services
A number that shows how trustworthy you
are with money. The range is ~300-850.
What affects it most:
payment history
credit usage
length of credit history
types of credit
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Credit Score
Higher Score = better deals, lower costs
Credit Score Ranges
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You are borrowing money every time you use
the credit card. Then you get a monthly bill
(statement).
Credit Limit = max you can spend
Minimum Payment = the smallest amount due
Statement balance = total owed
Credit Cars - How They Work
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APR = Annual Percentage Rate
The cost of borrowing
money
$100 purchase, don’t pay it
off, becomes $120+ over
time
Interest makes everything
more expensive
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Interest (APR)
Good:
Pay the full
balance every
month
Spend within
your means
Track spending
Good vs. Bad Credit Behavior
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Bad:
Overspending
Ignoring bills
Only paying the
minimum price
Always pay on time
Keep balances low
Don’t open too
many accounts at
once
Check your
statements
regularly
KEY TAKEAWAYS
USE THE
CREDIT
DECISION
PRACTICE FOR
MORE ON
CREDIT
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Thank You!
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