Number One Variable Among Discussion Questions
respond to each number in a NON ESSAY format.
1) answer / response
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minimum 85 words
1)Week 4 materials introduce the concept of credit reports and scores, with a focus on how to build and improve credit scores. You will learn about the Five C’s and how debt-to-income ratios affect credit decisions.
In addition, you will consider the costs and benefits of renting versus buying an apartment or home. Consider the connection between credit worthiness and approval decisions from landlords or mortgage banks.
2)This week we were learned about concepts that affect our daily life. I summarized most of it in this week’s “Overview”.
Consumer Credit is one of the pillars that sustain capitalistic markets, not only in the US but in all markets which exercise free marketing. At one time people frowned upon it, they perceived it as a necessary evil used by fools and people who wished to live beyond their means. Nowadays most people in the US, believe that they will not be able to survive without credit, such as Home Loans, and Credit Cards.
The five criteria in selecting a financial institution are FDIC – Federal Deposit Insurance Corporation. One should always look for a confirmation that the federal government ensures the Financial Institution of your choice. It is a good feeling to know that the money deposited is insured by our government Financial Stability – One should verify that the Institution is financially sound. An excellent tool to check is the Internet the keyword is “Financial Health.”
Fees – All banks charge fees. It is a good practice to ensure that the bank is not charging excessive fees for their services
Minimum Requirement – Banks require that the client maintain a minimum amount of deposit in the account. It is good practice to find what is the amount necessary to have the bank waive fees. Customer Service – In the order of importance customer service is the number one variable among different banking Institutions. It is so important that the main reason for people to transfer from one bank to another is the service they receive.
The five Most essential factors in evaluating one’s credit are Payment History, Debt ( how much one owes), New Credit Type of Credit Length of Credit.
Most of these factors are self-explanatory except for New Credit. Acquiring new credit, such as Credit Card does not help your credit score. A better way is to have fewer sources of credit and use them wisely. Another point which is very important is the ratio between the amount spent and the amount owed. A good rule of thumb according to IGRAD is a ratio of 85%.
3)Gaetano,
This week was filled with an abundance of useful information regarding our credit scores. Although each concept I have learned about will be extremely beneficial, I really enjoyed learning about the five criteria in selecting a financial institution. I have not given any thought to APR rates, or what the differences may be within financial institution. With the information I learned this week I know exactly what to look for with any banks I currently have or is considering choosing in the future.
4)What are the components of the FICO score? Based on the elements of the FICO score, what may you do to enhance your FICO score?
5)A fico score allows creditors the ability to report the key components of a consumers credit score. Credit scores can range from 350-850, 350 ranking as one of the lowest and 850 ranking as the highest in the fico score. Furthermore, other key components such as how much available credit is being used, the age on the accounts etc. In order to enhance your fico score paying off your bills on time is one of the main ways to improve your fico score. When creditors notice consistent on time payments it displays the individual will not be a high risk.
6)There are several factors involved in making the decision to apply for a credit. I will talk about the two major factors to consider when applying for credit and they are your current credit score and also your current financel situation. I say this because if your credit score is bad there is bound to be a lot of bad loans with terrible APR since your credit is low. Ones financel situation is the largest factor from the teachings I have read, if you to begin with can afford a loan or a credit card do not get one its better in your current situation to get more income or pay off your current debts to better your future credit.
7)What are some advantages and disadvantages to renting a home? What are some strengths and weaknesses of owning a home?