Understanding Credit

Real Estate Continuing Education Course

Course Description

This course is designed to help real estate licensees understand the importance of credit in the context of buying a home and the overall financial picture of the homebuyer. In this course, licensees will gain working knowledge of credit, where it comes from, how it affects access to lending products, and how it is affected by consumer behavior. 

Understanding Credit covers topics such as credit scores, debt-to-income ratios, and limits as they apply to mortgage lending, as well as the role of credit in lifetime wealth accumulation and the financial well-being of consumers. In addition to understanding credit conceptually, licensees will learn best practices for educating and supporting their clients in making credit and borrowing decisions. 

The course also covers discriminatory credit practices, consumer rights, and the key pieces of legislation that enacted those rights including the Equal Credit Opportunity Act (ECOA), Consumer Credit Protection Act (CCPA), Fair Credit Reporting Act (FCRA), and others. 

By the end of the course, licensees will appreciate the significance of consumer credit in modern life and how restricted access to credit has contributed to racial disparities in homeownership, wealth, and home values across the United States. By the end of the course, licensees will have a better understanding of these complex issues, the importance of equitable access to credit, and the opportunities that credit affords.

Course Topics

In this course, you will master the following topics:
•    The Role of Credit in Real Estate
•    The Importance of Credit in the Real Estate Industry
•    Credit and First-Time HomeBuyers
•    Debt-To-Income (DTI) Ratios and Limits
•    Why Credit Matters
•    Credit Reports versus Credit Score
•    Credit History and Consumer Behavior
•    Discriminatory Credit Practices
•    Equal Credit Opportunity Act, Consumer Credit Protection Act, and Credit-Related Laws
•    Consumer Rights

Course Learning Objectives

Upon completion of this course, you will be able to:
•    Express the importance of credit in real estate ownership.
•    Describe the supportive role a real estate licensee plays in transactions with inexperienced borrowers in need of elevated support and guidance.
•    Understand Debt-to-income ratios including how they are calculated and what role they play in a prospective borrower’s access to credit.
•    Understand the differences between credit scores, reports, and various credit reporting sources which can yield changeable credit score results.
•    Identify the different elements of a credit report and how to interpret credit results.
•    Coach clients in matters of desirable credit behavior, credit monitoring, and improving credit.
•    Describe the disparate impacts resulting from lack of access to credit including racial gaps in homeownership and wealth building.
•    Summarize the importance of the key pieces of legislation such as the Equal Credit Opportunity Act, consumer credit protection act, and Fair Credit Reporting Act.
•    List and define the specific rights outlined in these acts pertaining to consumer's rights to credit, information, disclosures, and reporting.

Approved States: CO