Navigating Credit Scores and Credit Cards

Greeting readers! 

Happy 2024! While we are beginning a new year, we are still working hard to help meet the same goal: improve youth health and well-being in our communities. There are many ways you can do that this year along with us. Here’s how:

  • Become a CARE Coalition member and participate in our quarterly meetings. In our meetings, we bring awareness about new community agencies and their resources, network, and have a free lunch! Our next meeting is February 23rd from 11:30 a.m. to 1:00 p.m. at Tolleson Union High School District Office. 

  • Join our CARE Community Training and learn more about strategies and skills you can use when working with youth in our community. Did we mention these were free? Our next training is on February 2nd from 2:00-3:30 pm at the West-MEC START campus. 

  • Follow us on social media (@carecoalitionaz) to learn about upcoming events, quick tips, mindful skills, and updates on our team’s progress during this grant year. Follow on Instagram, Twitter/X, Facebook, Tik Tok and, coming soon: LinkedIn!

  • Register for our CARE Conference: Empowering Communities and Inspiring Youth. On March 1st, from 8:00 am to 2:30 pm, we will be holding our FREE annual conference, where our goal is to equip attendees with the necessary tools to nurture community resilience and enhance the health and well-being of adolescents in their respective communities. Want to register? Follow the website link to do so today!

Click https://carecoalitionaz.org/events/ to register for upcoming events and explore our CARE website. We hope you join us for our upcoming events this year!

January is Financial Wellness Month, and it’s a great opportunity to prioritize your financial well-being. However, you can use these skills all year round. Financial wellness means equipping yourself with the knowledge and education to make financial decisions that will help lead you to a more successful life. Understanding credit scores and credit cards is a big part of finance and money management.

So, what is credit? 

Credit is the ability to borrow money with the understanding that you’ll pay it back later. The two types of credit that are most common are:

Borrowers are given a set credit limit and can borrow and repay that money as needed. An example of this would be credit cards.

A type of loan where individuals can borrow a set amount of money with a fixed repayment plan. Typical examples are student loans, mortgages, car loans and personal loans.

Why is credit needed? 

  • Establishes creditworthiness (how well a person manages credit and how risky it might be for a lender to let them borrow money).

  • Enables more loaning opportunities (car loans, mortgage loans & refinancing options).

  • More flexibility when it comes to money.

What are credit scores? 

A credit score is a tool used to predict your credit behavior. Credit scores reflect a person’s creditworthiness and how likely they are to repay their debts on time.

A credit score is comprised of:

  • 35%-Payment history: making payments on time; any missed payments will negatively impact your score

  • 30%-Amount owed: looks at how much available credit you have

  • 15%-Length of credit history: the longer your credit history, the higher your credit score

  • 10%-New credit: how many accounts you have opened; also includes soft/hard inquiries 

  • 10%-Types of credit (credit cards, student loans, mortgage)

What are credit cards? 

Credit cards are a type of credit provided by banks or credit unions that allows individuals to borrow funds within an approved credit limit (the maximum amount you can borrow). The lender determines credit limits, which will differ depending on your credit score and gross annual income. Every time you pay for something with a credit card, you borrow money from the card issuer to cover that purchase. You must then pay that money back in full at the end of the month or over time.

To get a credit card, you must apply for it through a bank or credit union. You must be 18 years old to apply with proof of income, or an individual can get a co-signer. A co-signer with good credit and income can guarantee they will pay your credit card balance if you stop making payments. 

Credit cards are a huge responsibility but not something to fear. As long as you use them wisely, they can benefit your financial journey. 

Here’s how YOU can be a Prevention Partner:

Learning and understanding credit scores and credit cards is never easy so help your friends by sharing helpful tips you learned!

These conversations can help model positive behavior surrounding money and help build healthy money habits. 

Finances can be heavy, meaning that they can drain you emotionally and mentally, so remember to take care of yourselves while navigating your money management. 

Register today at https://carecoalitionaz.org/