Workshop Summary
This workshop was aimed at informing and educating students on credit score. The unstructured provided the students with a definition of credit score and from his definition and we found that credit score is a measure of the credit risk of an individual, and is calculated from credit report through the use of a standardized formula (Johnson, 2011). The essence of the workshop was to inform the students of the risks involved in lending money. Large lending institutions undergo some level of risks when lending money to consumers to financing cars, buying homes and financing college education. In order to minimize these risks, financial institutions examine the credit history of borrowers in order to ascertain their credibility. Borrowers found with poor credit histories are less likely to get loans from lenders due to their bad rating. It is the responsibility of credit bureaus to compile and maintain your credit history. Such bureaus collect individual credit history from banks, credit card companies, mortgage companies, and other lenders in order to create an extensive credit report. They use such information to compile a three-digit credit score. Individuals with good repayment history have high credit scores and are able to big loans at lower interest rates.
Practical Application
The information and skills gained from this workshop is useful in understanding how credit score is calculated. From the workshop, I was able to learn how the credit score is calculated and organizations that get involved in this activity. The skills gained from this workshop are crucial in determining the credit worthiness of an individual since this information determines the borrowing power for every individual. I also leaned that it is crucial to make sure that the information provided in the report is precise and true since credit reports are usually requested by insurance companies, landlords, and employers. The information learnt from the workshop is useful to lending institutions since they have to get a report of individual credit score in order to ascertain their credit worthiness. Individuals with credit rating of below 600 are not able to receive loans from banks. Credit repayment history is essential in determining the ability of an individual to payback a loan granted by another financial institution.
Personal Impact
The information and activities from this workshop can be used in enhancing my personal leadership profile in a number of ways. To start with, having a bad credit history can be damaging to the reputation of any leader, and I would make it my duty to make sure that I have a desirable credit rating. This knowledge will also enable me to educate and inform other employees on the importance of maintaining a good credit history since it can hinder their future developments when they require loans to advance their businesses or education. The information gained from this workshop has enabled me to know the agencies that are responsible for conducting credit rating, which will be beneficial to me and employees that I supervise. I was also able to learn that credit information is important to employers and team leaders within an organization. Getting such information on employees can be helpful in determining means of helping them get access to loans even if they have undesirable credit rating.
Reference:
Johnson, R. (2011). Credit Scores and You: Understanding the Importance of a Great Credit Score (A Father's Hope for the Future. Indianapolis: Dog Ear Publishing.
