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Danny Singh is the teen who refinanced his mom's house and car at 14 and has never been late on any type of bill for the past 8 years. He now hopes to raise the awareness of the student loans crisis and teach consumers the most effective methods to repay their debts in months instead of years while having enough money for everyday expenses and retirement. For this reason, he is doing financial seminars and has published a book titled "Finance 101: The Whiz Kid's Perfect Credit Guide." All profits are donated to the Children's National Medical Center for HIV treatment research. Danny has been recognized by Governor Rick Perry, First Lady Anita Perry, Seminole County Commissioner Bob Dallari, Florida State Representative Jason Brodeur, and Senator Marco Rubio. Please contact him using www.facebook.com/studentsfinance. Thank you.
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Understanding Credit
Tips For A Successful Financial Future... Your Future!
Danny Singh
Disclaimer● Any advice given is based on personal financial
experience. ● Some information may be influenced by personal
thoughts.○ Creditors should never be cheated no matter
what the circumstances or personal hardships.
● People may have different perspectives on the
information presented and advice given.
Why Is Good Financial Behavior Important?● Become rich.
● Pay little or no interest.
● Guarantees cheaper bills, better lifestyle, and no
stress.
● Getting better jobs: Make higher incomes.
● Secures family's financial future.
● Good financial behavior can be shown through credit.
Credit Being Granted
● Creditors grant loans. Any money being paid back. - Credit cards. - Automobile loans. - Mortgages- home loans. - Personal loans including student loans.
● Creditor is a financial institution or bank. -Financial institution: Ford Motor Credit. -Bank: Wells Fargo, Bank of America.
● Purpose of credit: Show utilization. -Spending trends. -Payment trends.
Having Credit
● As a possessive noun. ○ Consumer refers to their good, bad, or limited credit history.○ Example: "I have bad credit." ○ Literal form: "I have bad credit history."
● Credit history = Creditworthiness.
● Goal: Demonstrate high creditworthiness level.
○ Creditworthiness = Trustworthiness.○ Credit scores = creditworthiness level.
● Credit cards are needed. ● Companies must know you will not cheat them: Electricity, car,
water, insurance, cell phone, house, car, etc.
Bad Credit Guarantees Paying HIGH Interest And Fees
Keep Getting Denied For Credit
● Credit union or bank = Get secured credit card.○ Secured credit card: Security deposit = Spending limit. ○ Security deposits: Refundable if account is closed or upgraded to
unsecured account.
● Personal recommendation: Wells Fargo secured credit card.○ Cheapest secured credit card- $18 annual fee. See if credit union
can offer cheaper or no fee.
After year of history, ask if annual fee can be removed/reduced. Account can be ungraded to unsecured = Improves credit.
Establish Good Credit 1. Check credit report. Annualcreditreport.com. Verify accuracy of personal information. 2. Source of income: Savings or a job. 3. Apply for credit card. If denied, call for reconsideration.
○ Department store cards are easier to get than bank cards.○ Use Financeglobe.com. No annual fee cards!
4. Do not apply for many credit cards at once. 2-3 per every 2 years.
○ Credit checks (inquiries) lower credit scores.○ High risk to creditors- Desperate for money.
5. Use cards once every six months. No carrying balances. Build LONG HISTORY, don't close accounts unless expensive annual fee.
Establish Good Credit (Continued)
6. No job? (Don't be in so much debt) Before becoming late.
○ Contact non-profit credit counseling agency. Google search and read reviews.
○ Contact loan issuer, ask for more time to pay- Defer.
○ Do not file bankruptcy or debt settlement.○ Borrow money from family.○ Get a new loan and transfer balances.○ Use any savings or assets.○ Keep looking for job aggressively!
Fair Isaac Corporation Credit Scores (FICO Scores) ● 3 scores (300 - 850), one from each bureau. ● Scores = Rankings.
● Extra information = Shows likelihood to pay back
loans. ○ 660 and above = Very likely to pay back loans.
Cheap interest.○ 659 and below = Very unlikely to pay back loans.
High interest.
● Order only on MyFico.com. Must pay everytime.○ Other websites offering credit scores = FAKO scores.
Tries to replicate FICO and not the same.
Credit Bureaus
● Private companies. -Collects financial information- loans only. -Does not collect checking, savings, IRAs, 401K. -Collects personal information such as on applications.
● Federal trade commission monitors them.
● When consumer applies for credit, creditors pay fees to one or all of the credit bureaus. Bureaus make money.
-Obtains credit reports and credit scores.
Not a credit bureau but still a consumer reporting agency.
○ Go to consumerdebit.com - Free report once a year.○ Only records deposit accounts- checking and savings.○ Detect fraudulent or negative deposit accounts.○ Does not rank using score.○ Should be checked regularly.
Student Loans
They cannot be eliminated with bankruptcy EVER.
Not paying them = No tax refunds. Bad credit. No
employment.
Student Loans1. Accept subsidized (interest free) loans. 2. Fewer classes. Less debt = Less stress = More success! 3. Save money for 4 year or grad school- Community college. 4. Build excellent credit.
○ Call issuer for lower interest rate every 3-4 months. 5. Transfer student loans to credit union credit cards.
○ Compare interest rates and no high balance transfer fees. 6. Before becoming late, consider options on handout.
○ Extended and income based repayments offer lowest monthly payments but most interest.
7. Extra money = Pay unsubsidized loans. Stafford loans! 8. Automatic payments = Interest discounts. 9. If no extra fees (call issuers), pay student loan with credit card.
● Rewards save money. ● Pay off credit card immediately = No interest.
10. Deduct student loan interest from taxes. $2,500 11. Do not invest money heavily. Instead, pay student loans. 12. Apply for scholarships and grants. Scholarships available to honors students.
If possible, buy books from Amazon, Betterworld, and online stores before buying at the book store.
Don't drop classes after add/drop period.$300 - $400 goes to garbage and STILL
compounds with INTEREST.
Pay down debt before having kids.
Do extended repayment plan or income-based repayment = Lowest monthly payments.
AVOID PRIVATE AND NON-CERTIFIED (UNCERTIFIED) STUDENT LOANS! FROM BANKS AND SALLIE MAE! 16%, 17%, 18%
President Obama's Student Loan Reform Act
Signed into law 2010. 1. Can consolidate and refinance student loans = Interest discounts. -One monthly payment. 2. No payments above 10% of income. 3. Remaining student loan debts drop after 20 years. No longer 25. 4. Teachers, nurses, members of armed forces, public service careers: Drops in 10 years.
Fraud And Phishing (Evil!)
Scammers try to get information by any means- fake websites, fake phone calls, fake
letters, fake facebooks, etc.
Ruin credit- Student loans, credit cards, bank accounts, anything!
Victim? Change social security number
Freeze creditPolice
Retirement!
If employed, open up Roth IRA with credit union or community bank
After tax dollars go into Roth IRA
Cannot be deducted from taxes
You can take money (not earnings) before
retirement without 10% tax penalty and income taxes
NEVER EVER! PLEASE SPREAD MESSAGE! EVEN IF YOU HAVE BAD CREDIT
NO PAYDAY LOANS! NO INTERNET BAD CREDIT LOANS! NO BAD CREDIT
CAR DEALERSHIPS SUCH AS DRIVE TIME!
NO CAR TITLE LOANS! NO PINK SLIP LOANS!
NO PAWN SHOP LOANS!
NO CASH ADVANCE LOANS!
NO 36%, 59%, 79% OR ANNUAL FEE CREDIT CARDS!
NO FOR-PROFIT SCHOOLS!
DO NOT WITHDRAW MONEY FROM IRA OR 401K OR 403B! UNTIL RETIREMENT, LOAN AGAINST RETIREMENT IS OKAY
Closing RemarksEconomy cannot improve. Interest rates will not drop. Employment will not improve. Banks will not stop imposing fees. (Bank of America fee). Low character. Bankruptcy/settlement is easy = Not honorable. Do not have to be smart to have excellent credit. No matter what hardships, circumstances, debts, interest rates. Remain motivated! You will appreciate it!
To view presentation, please go to:www.facebook.com/studentsfinance
