Understanding Credit for Jasmine

Introduction

• Jasmine is a college student at State University.
• She has no credit history or score due to fear of using credit.

Steps to Understanding Credit

1. Watch Introductory Videos
   • "Credit Cards 101"
   • "Loans 101"
2. Understand Your Credit Report and Score
   • A credit report details history: payment history, age, and status of accounts by Transunion, Experian, and Equifax.
   • Credit score is a summary number between 300 and 850.
   • High credit score leads to lower interest rates and better rewards.
   • Credit scores affect insurance, apartment leases, and cell phone plans.
   • Access to credit scores is now free through several websites.

Components of a Credit Score

1. Payment History (35%)
   • Importance of paying bills on time, even minimum.
   • Set up automatic payments to avoid late payments.
2. Credit Utilization (30%)
   • Keep usage under 30% of the credit line.
   • Pay off balances early or ask for a credit line increase.
3. Length of Credit History (15%)
   • Avoid closing old accounts unless necessary.
4. Recent Inquiries for Credit (10%)
   • Limit applications for new credit cards/loans.
5. Types of Credit Used (10%)
   • No specific rule; don't apply for multiple credit types just to increase score.

Recommendations for Jasmine

• Build Credit History
  • Use credit by opening a student or secured credit card.
  • "Credit Cards 101" and "How to Rebuild Your Credit" videos offer guidance.
• Check Credit Report for Errors
  • Annually review credit report for mistakes.
  • Contact the credit bureau to correct any errors.

Conclusion

• Jasmine (and others) should now have a better understanding of how credit scores and reports work.
• Upcoming videos will cover common mistakes and best practices for credit cards and loans.
• Website offers educational content, free credit score access, and credit card recommendations.