Fannie Mae Foundation: How to Buy a Home

Vocabulary
agency
credit report
late charges
cancelled checks
debts
utility
check (v.)

Purpose
To be familiar with a credit report and its use.

Warm-up
Some adults do not like to use credit cards. They
dislike debt of any kind. Discuss the advantages and disadvantages of credit cards. Discuss how credit cards and other types of credit are used in the United States. Ask some of the following questions:

How do you feel about debt?

Are credit cards a good idea?

Why is it important to pay bills on time?

Some credit card companies award airline miles or gifts. What is your opinion of this practice?

Pre-reading activity
1. Ask learners to read the title “Your Credit Report.” Have them look at the illustrations on page 12 and guess what a credit report is.

2.Have learners read the paragraphs under the pictures and circle any new vocabulary.

Explain the difference between a credit report and a nontraditional credit history. You will also have to explain the different categories listed on Tran’s credit report. Learners should understand the different types of payment plans. Explain the difficult vocabulary before having learners answer the comprehension questions.

Unit 1: Do you want to buy a home?

Lesson 3: Your credit report

When you ask for a mortgage loan, you must list all your debts and the monthly payments you owe. For example, you may owe money on a car loan. Perhaps you owe money to credit card companies. The mortgage lender will get a credit report from a credit reporting agency to check the information you have given it.

A credit report lists all your credit cards and loans. It shows how much money you owe and how long you have owed this amount. It also shows the type of loan and your payment plan. All this information will help the mortgage lender decide if you will be able to repay a mortgage loan.

Nontraditional Credit History—If you do not have credit cards or have never taken a loan from a bank or business, you can still put together a credit history. You can show that you pay your rent, telephone, car insurance, and utility bills on time each month. For example, you can collect records of cancelled checks or make copies of monthly bills that do not have late charges. This is called a nontraditional credit history.

Tran’s credit report

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