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