Why Mortgages Have Lower Interest SS.912.FL.4.3 Explain that loans can be Examples of Collateral Rates Than Unsecured Loans unsecured or secured with collateral, that collateral is a piece of property that can be sold by the lender to recover all or part of a loan if the borrower fails to repay. Explain why secured loans are viewed as having less risk and why lenders charge a lower interest rate than they charge for unsecured loans. Explain How Down Payments Reduce Installment Buying: Should You Make a Benefits of Down Payments to Borrowers SS.912.FL.4.4 Describe why people often Loan Cost Down Payment? and Lenders make a cash payment to the seller of a good—called a down payment—in order to Advantages and Disadvantages of Making How Down Payments Provide Equity reduce the amount they need to borrow. a Down Payment Describe why lenders may consider loans made with a down payment to have less risk because the down payment gives the borrower some equity or ownership right away and why these loans may carry a lower interest rate. Credit: Making Payments on Time Consequences of a Poor Credit Payment Function of Credit Bureaus SS.912.FL.4.5 Explain that lenders make History credit decisions based in part on consumer (Lesson Plan: Basics of Credit ) Factors that Cause a Lender to Deny payment history. Credit bureaus record Creditworthiness Credit borrowers’ credit and payment histories and provide that information to lenders in (Lesson Plan: Finance and Responsible credit reports. Spending ) What’s a Importance of Having a Good Credit Score Factors That Influence Credit Scores SS.912.FL.4.6 Discuss that lenders can “Credit pay to receive a borrower’s credit score Information Contained in Credit Reports What Your Credit Says About You from a credit bureau and that a credit score is a number based on information in Your Credit Report: What’s in It? a credit report and assesses a person’s credit risk. (Lesson Plan: My Credit Report Card ) (Lesson Plan: Understanding Credit Reports ) How Credit Reports Are Used Who Has the Right to View Your Credit How a Good Credit Score Can Provide SS.912.FL.4.7 Describe that, in addition to Report? Financial Benefits assessing a person’s credit risk, credit reports and scores may be requested and Can a Poor Credit Report Affect Your used by employers in hiring decisions, Employment? landlords in deciding whether to rent
Examples of Collateral Why Mortgages Have Lower Interest Rates Than Unsecured Loans SS.912.FL.4.3 Explain that loans can be unsecured or secured with collateral, that collateral is a piece of property that can be sold by the lender to recover all or part of a loan if the borrower fails to repay. Explain why secured loans are viewed as having less risk and why lenders charge a lower interest rate than they charge for unsecured loans. Explain How Down Payments Reduce Loan Cost Installment Buying: Should You Make a Down Payment? Advantages and Disadvantages of Making a Down Payment Benefits of Down Payments to Borrowers and Lenders How Down Payments Provide Equity SS.912.FL.4.4 Describe why people often make a cash payment to the seller of a good—called a down payment—in order to reduce the amount they need to borrow. Describe why lenders may consider loans made with a down payment to have less risk because the down payment gives the borrower some equity or ownership right away and why these loans may carry a lower interest rate. Credit: Making Payments on Time (Lesson Plan: Basics of Credit ) Consequences of a Poor Credit Payment History Creditworthiness Function of Credit Bureaus Factors that Cause a Lender to Deny Credit (Lesson Plan: Finance and Responsible Spending ) SS.912.FL.4.5 Explain that lenders make credit decisions based in part on consumer payment history. Credit bureaus record borrowers’ credit and payment histories and provide that information to lenders in credit reports. What’s a “Credit Information Contained in Credit Reports Your Credit Report: What’s in It? (Lesson Plan: My Credit Report Card ) Importance of Having a Good Credit Score Factors That Influence Credit Scores What Your Credit Says About You SS.912.FL.4.6 Discuss that lenders can pay to receive a borrower’s credit score from a credit bureau and that a credit score is a number based on information in a credit report and assesses a person’s credit risk. (Lesson Plan: Understanding Credit Reports ) How Credit Reports Are Used Who Has the Right to View Your Credit Report? How a Good Credit Score Can Provide Financial Benefits Can a Poor Credit Report Affect Your Employment? SS.912.FL.4.7 Describe that, in addition to assessing a person’s credit risk, credit reports and scores may be requested and used by employers in hiring decisions, landlords in deciding whether to rent
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