Managing my money for young adults
Managing my money for young adults

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Managing my money for young adults

Session 7: A good credit rating and how to keep it

Introduction

In the video, Bobby puts in context the themes of the session. You’ve looked at the institutions that lend money, the various ways money can be borrowed and at what determines the cost of borrowing. You’ve also looked at when borrowing is rational and when it is foolish. In this session you extend your analysis of debt and explore how to integrate the cost of managing your debts within your budget. You take a look at the activities of the credit rating agencies and at how you can manage your financial profile to maximise the credit rating assigned to you.

You start by looking at how decisions about whether or not to borrow money should be taken only after examining alternative routes for financing major acquisitions.

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Transcript

BOBBY SEAGULL:
In the previous session, you looked at the institutions that lend money and at the various ways money can be borrowed. You also looked at the factors that determine the cost of borrowing and at the role played by the Bank of England in setting the official rate of interest, or bank rate, which, in turn, influences the interest rate lenders charge you. In this session, you look further at borrowing and at how to keep the cost of managing your debts within your budget. You also spend time examining in more detail the activities of the credit ratings agencies and explore how you can manage your financial profile to maximise the credit ratings assigned to you.
You'll start by looking at how decisions about whether or not to borrow money should be taken only after an examination of the alternative routes for financing major acquisitions. There's plenty of guidance in the session that'll help you make good financial decisions now and in the future. So enjoy the session.
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By the end of this session, you should be able to:

  • understand the pros and cons of borrowing money to buy things – relative to other ways of financing a costly purchase
  • understand credit rating and the activities of the credit rating agencies
  • know how to maintain a good credit rating
  • know what you can do it you have problems with debts.
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