Financial Fitness Fundamentals:

Part I Winter 2016

Part I: Credit Basics

FICO Score Breakdown

Credit Score What it Means 760-849 Excellent score. A lender is likely to offer you

their best interest rate.

700-759 Great score. You should have no trouble getting a loan at a good interest rate.

660-699 Good score. You should have no trouble getting a loan at a good interest rate.

620-659 Fair score. You may qualify for a loan but not a good interest rate.

580-619 Poor score. You may qualify for a loan, but the interest rates will be extremely high.

500-579 Very poor score. If you qualify for a loan the interest rates will be extremely high.

Damage Points How Mistakes Affect FICO Scores

Credit mistake If your score is  680 If your score is 780

Maxed-out card Down 10 to 30 pts.  Down 25 to 45 pts. 

30-day late payment Down 60 to 80 pts. Down 90 to 110 pts. 

Debt settlement Down 45 to 65 pts.  Down 105 to 125 pts. 

Foreclosure Down 85 to 105 pts. Down 140 to 160 pts. 

Bankruptcy Down 130 to 150 pts. Down 220 to 240 pts. 

Source: FICO

Credit Report vs. Credit Score Credit Report

•  Compiled by Equifax, Experian, and TransUnion

•  Shows credit history •  Check to verify information

and prevent identity theft •  Request at

annualcreditreport.com

Credit Score

•  Raw number •  Ranges from 300-850 •  Used by lenders, apartment

companies, potential employers to determine risk

•  Use estimators or request

official

Get Your Free Credit Score Here

•  Fico Score Estimator

•  Credit Karma

•  Credit.com

•  Quizzle.com

Credit Terminology Annual Percentage Rate (APR) The interest rate you will pay if you carry a balance

Grace Period The number of days you have to pay your bill in full before a finance charge is applied

Finance Charge Additional fees added to the

original amount of the loan

Fees These charges include annual, cash advances, balance transfers, late payments, returned items, and more

Balance Transfer Transferring the balance of one card over to a second card

Pros of Credit Use

•  Building a credit history

•  Budgeting and managing finances

•  Planning purchases

•  Emergencies

Cons of Credit Use

•  Affects your financial future

•  Over-spending

•  Selecting the wrong card

Part II: Apartment Renting Fundamentals

Before You Begin

•  Fees §  Application §  Credit Report Check

•  When Signing §  First Month’s Rent? §  Security Deposit?

•  Monthly Expenses

?

Wait, What Can I Afford?

Living Expenses 80%

Savings 10%

Debt Repayment

10%

Are You Up For A Challenge?

•  Track your expenses for 3 months •  Save all receipts •  Hate tracking expenses? Use Mint.com or Budgetracker.com

Make ‘em S.M.A.R.T Specific Goal Measurable Time-

Sensitive Attainable Realistic Action

Security Deposit (Short term) $800 4 months $200/month

$50.00/week

Cut back Starbuck’s lattes to twice a week

Buying a Sofa (Intermediate) $600 6 months

$100/month ($25.00/week)

Cut back weekend restaurant spending

Move to River

North (Long term)

$3000 10 years $300/month ($75/week)

Keep debt low by searching for scholarships

On Campus vs. Off Campus

Sanctuary Hall Standard $1,200/Monthly

V.S.

3 Bedroom Apartment $600/ Monthly

Food: $200.00/Monthly

Food: DePaul Plan $402.00/Monthly

Step 1: Determine Who You Want to Live With

Determine the Expectations How will you pay rent?

What is the visitor policy?

Will you share groceries?

How will you handle bills?

Are there quiet hours?

Step 2: Start Browsing

Explore Neighborhoods

Talk to people

Visit Friend’s Apartments

What to Look at First •  Location •  Size •  Safety •  Ability to paint •  Pet policy •  Architectural details •  Amenities

Good Bad •  High water pressure

•  New windows

•  Level floors

•  Higher than 1st floor

•  Hard to flush toilet

•  Water damage

•  Cracked walls

•  Bad caulking

Apartment Characteristics

Step 3: Sign the Lease

•  Rent •  Late charges •  Security deposit •  Roommate Policy •  Terms for Leaving Early •  Subletting Options •  Cleaning at move out

READ CAREFULLY

Step 4: Move in!

Damage Control

•  Photograph condition upon move in •  Consequences for failing to report

serious damage •  Repairs that exceed security deposit

amount

Subletting

•  Property damage

•  Uncollected rent

•  Lack of landlord approval

•  Possible evictions

: allowing someone to live in your apartment to cover the rent while you're away Verb |  sub·let  |  ˈsəb-ˈlet

•  Written agreement covering rent

•  House rules and any other provisions in the primary tenant's lease

•  Transfer utility bills

Solutions Problems

Know your Rights as a Tenant •  Handling repairs •  Security deposit •  Landlord notice •  You must: - Report damages - Abide by codes

- Financially responsible for negligent damages

DePaul Legal Services Fair Housing Act

§ Contact DePaul Legal Services for tenant rights information § Sarah Baum, J.D.: 773-325-1588

Illinois Tenant Union § www.tenant.org § Chicago Tenant Rights § Personal consultations: (773) 478-1133

Renter’s insurance § Approximately $100 - $250 annually § Covers a variety of common damages and some property even when outside of the apartment.

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