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0923 Having Bad Credit

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Welcome to English as a Second Language Podcast number 923 – Having Bad Credit.

This is English as a Second Language Podcast episode 923. I'm your host, Dr. Jeff McQuillan, coming to you from the Center for Educational Development in beautiful Los Angeles, California.

Our website is ESLPod.com. Go there. Become a member. Download a Learning Guide for this episode.

This episode is a dialogue between Alicia and James about having problems getting someone to lend you money. Let’s get started.

[start of dialogue]

Alisha: This is the second time I’ve been turned down for a credit card in a month. I don’t know what I’m doing wrong.

James: Have you checked your credit report recently? Maybe you have a bad credit rating.

Alisha: I have a full-time job with a good income, which they can easily verify, and I don’t have any outstanding debt, so what could be the problem?

James: Have you had a credit card before?

Alisha: Yes.

James: Did you always make your payments on time?

Alisha: Well, no.

James: Then that may be your answer. Your payment history makes a big difference with the credit bureau. If you’ve missed payments or been late, that’s a big strike against you.

Alisha: You mean if I were late a few times, I wouldn’t be able to get another credit card?

James: A few times? How many times?

Alisha: Well, maybe a lot of times.

James: And why do you need another credit card if you already have one?

Alisha: Had one, past tense. The credit card company cancelled it.

James: Aha, I think we’ve just found the crux of the problem.

[end of dialogue]

Alisha says, to begin our dialogue, “This is the second time I’ve been turned down for a credit card in a month.” A “credit card” is like a Visa or a MasterCard that you use to buy things with. “To be turned down” means to be denied, to be rejected. It’s a two-word phrasal verb meaning not to allow someone to have something or to do something. In this case, Alisha has tried to get a credit card, but the credit card company said no. They turned her down. She says, “I don’t know what I’m doing wrong.”

James says, “Have you checked” – have you looked at – “your credit report recently?” A “credit report” is a written statement, usually from one of three large companies that produce these statements, about whether you have paid your credit card bills and your other loans from banks and other places on time. If you don’t pay your bills on time, if you send the money in late, that will show up on – that is, that will appear on – your credit report. And if you do that a lot, companies are not going to give you a credit card if they see that you have not paid your credit card bills in the past – your credit card bills from other banks and companies.

“Credit reports” are things that every American who uses a credit card has. Most Americans do not have a very good credit report – a very good “credit record,” we would say. They have problems. There are ways of correcting the problems but it takes a little time. But let’s continue with our dialogue.

James says, “Maybe you have a bad credit rating” (rating). What these companies do, that produce the credit reports, is calculate how well you do on paying your bills, and they give you a number. A high number is good. A low number is bad. So, having a low, or bad, or negative credit rating is to have a number that indicates that you have had problems paying your bills on time in the past. Many credit card companies look at your credit rating and decide if they’re going to give you a loan or not. Banks also look at this information to decide whether they’re going to loan you money.

Alisha says, “I have a full-time job with a good income.” “Income” (income) is the money you get from working. Alisha says they can verify that information easily. “To verify” (verify) means to check to make sure it’s true. We might also say here, “to confirm.” Alisha says, “I don’t have any outstanding debt, so what could be the problem?” “Debt” (debt) is money that you owe other people, that you have borrowed from other people and that you have to pay back to them. “Outstanding debt” is money that you have not yet paid back – money that you still have to give back to the bank, or the credit card company, or whatever person or institution you borrowed money from.

James says, “Have you had a credit card before?” Alisha says, “Yes.” “Did you always make your payments on time?” Your “payments” is the money that you give the credit card company for your bill. “On time” means before or on the day that you are supposed to pay it. So, if you need to pay your bill by June 10th and you don’t pay it until June15th, you are not paying on time. You are late, and this will show up – this will appear – on your credit report and result in a bad credit rating. Alisha says, “Well, no.” No. I didn’t always make my payments on time.

James says, “Then that may be your answer.” That’s the reason, possibly. “Your payment history makes a big difference with the credit bureau.” Your “payment history” is a report about how often you’ve been late in paying your bills. The “credit bureau” (bureau) is a company that keeps track of that, organizes this information that produces the credit report, and gives the credit ratings. There are actually three large companies in the United States that do this. Most credit card companies use one of those three credit bureaus to decide whether they’re going to give you a credit card or not. Once again, banks do the same thing. They use one of the credit bureaus, one of the credit companies, to see whether you are a good person to loan money to.

James continues, “If you’ve missed payments or been late, that’s a big strike against you.” “To miss a payment” means not to do something you should have done, and in this case it would mean not paying your bill when you should have done. Sometimes people pay their credit card bills, but they pay them late. If you do this, James says, “that’s a big strike (strike) against you.” The expression “a strike against someone” means something that will make it more difficult to do something well, or something that makes other people have a negative or bad opinion about you. Usually, though, it’s the first meaning, referring to things that will make it difficult for you to do something that you want to do. If your parents don’t have any money and you’re not able to go to school, that’s a big strike against you. That’s a big problem in terms of you trying to be successful.

Now, the word “strike” actually comes from the game of baseball, when the pitcher of one team – the person who throws the ball – throws the ball, and the person who is trying to hit the ball, the batter, swings at the ball – moves the large stick, the bat, to try to hit the ball – but misses. That’s called a “strike.” There are other ways of getting a strike, too. If you hit the ball and it doesn’t stay within the lines that it’s supposed to stay in the field, that could also be considered a “strike.” I don’t want to go into the rules of baseball, but the term, you should know, comes from baseball.

Alisha says, “You mean if I were late a few times, I wouldn’t be able to get another credit card?” James says, “A few times?” – a small number of times. Then he asks, “How many times?” How many times has she been late? Alisha says, “Well, maybe a lot of times” – many times. James says, “And why do you need another credit card if you already have one?” Alisha says, “Had one, past tense.” Alisha is saying that she does not have a credit card anymore. Remember, James asked why she needs another credit card if she already has one. He says, “if you already have one,” because “you” – we use the verb form “have.” However, Alisha is saying that it’s not something she still has. It’s something that she used to have, and that’s why she uses the past tense “had” (had).

Alisha says, “I had one, past tense.” The term “past tense” is used in grammar to indicate that the verb is indicating time that has already passed, that an action has already taken place in the past and that it’s finished, over and done. Alisha says, “The credit card company cancelled it” – cancelled her card. “To cancel” (cancel) means to end something, to no longer be using a certain service or paying for something.

James says, “Aha! I think we’ve just found the crux of the problem.” “Aha” is an informal expression we use when you’ve found the solution to a problem, and James has found the solution to Alisha’s problem. He says, “I think we’ve just found the crux of the problem.” The “crux” (crux) is the most important part of a situation or a story, or in this case, a problem – the main thing, the main idea that’s important in understanding the problem. In Alisha’s case, she’s missed her payments and the credit card companies have cancelled her card. This is why other credit card companies won’t give her another card.

Now let’s listen to the dialogue, this time at a normal speed.

[start of dialogue]

Alisha: This is the second time I’ve been turned down for a credit card in a month. I don’t know what I’m doing wrong.

James: Have you checked your credit report recently? Maybe you have a bad credit rating.

Alisha: I have a full-time job with a good income, which they can easily verify, and I don’t have any outstanding debt, so what could be the problem?

James: Have you had a credit card before?

Alisha: Yes.

James: Did you always make your payments on time?

Alisha: Well, no.

James: Then that may be your answer. Your payment history makes a big difference with the credit bureau. If you’ve missed payments or been late, that’s a big strike against you.

Alisha: You mean if I were late a few times, I wouldn’t be able to get another credit card?

James: A few times? How many times?

Alisha: Well, maybe a lot of times.

James: And why do you need another credit card if you already have one?

Alisha: Had one, past tense. The credit card company cancelled it.

James: Aha, I think we’ve just found the crux of the problem.

[end of dialogue]

It’s easy to verify the quality of our scripts. Just listen to them. They’re all written by the wonderful Dr. Lucy Tse.

From Los Angeles, California, I’m Jeff McQuillan. Thank you for listening. Come back and listen to us again right here on ESL Podcast.

English as a Second Language Podcast was written and produced by Dr. Lucy Tse, hosted by Dr. Jeff McQuillan. Copyright 2013 by the Center for Educational Development.

Glossary
to turn down – to deny; to reject; to not allow someone to have or do something

* Shane was devastated when Shelby turned down his invitation to the senior dance.

credit report – a written statement of how one has used credit (borrowed money) in the past and an assessment of how likely one is to use credit responsibly in the future

* For how many years do unpaid credit card bills appear on your credit report?

negative credit rating – a low number that indicates one has not used credit well in the past and probably will not use it well in the future, making lenders less likely to want to lend money to that person

* The most common cause of having a negative credit rating is not paying bills on time, but other causes include having too many credit card accounts and having high balances.

income – the amount of money that one receives, usually from working or investments

* When Blake accepted the new job, it almost doubled his family’s income.

to verify – to check to see whether something is true; to confirm

* We are legally required to verify the social security number of all job applicants.

outstanding debt – money that has not been paid back; money that is owed

* Loire has a lot of outstanding debt from college, but she has a plan to pay it all back over the next four years.

payment – money given to a person or business, usually in exchange for a good or service

* How much are your monthly payments for electricity and gas?

on time – when something is due; not late

* Iago was almost fired for not coming to work on time. He’ll never be late again.

payment history – a report of what one has paid to a business over time, including the date and amount of the payment, when each payment was due and any amount that was not paid.

* According to the payment history, you sent in a few payments late last fall. What happened?

to miss – to not do something that one should have done, especially when it is one in a series of things

* Brandon is going to miss the meeting tomorrow, because he has a doctor’s appointment.

a strike against (someone) – something that makes it more difficult for someone to do well; an obstacle to success

* Being raised in poverty by uneducated parents was a huge strike against Berta getting into college, but she got in and graduated with good grades.

past tense – an informal phrase used to emphasize that one is talking about something that happened before, but is not happening now

* Ryan used to be overweight, past tense, but now he’s really healthy and in good physical shape.

to cancel – to end something and make it no longer valid or useable; to no longer provide a service

* Nina’s phone service was canceled due to nonpayment.

crux – the most important part of a situation, story, or problem

* Everyone is talking about the unimportant details, but nobody is focusing on the crux of the matter.

Comprehension Questions
1. What happened when Alisha was turned down for a credit card?
a) Her request for a new credit card was denied.
b) She was able to pay off all her credit card debt.
c) She lost her credit card.

2. How would the credit card company verify Alisha’s income?
a) By determining whether she is telling the truth about how much money she makes.
b) By deducting the money she owes from her paychecks.
c) By analyzing her resume and job history.

Answers at bottom.

What Else Does It Mean?
credit

The word “credit,” in this podcast, means a financial arrangement that allows one to pay for something later: “Did you buy your car on credit, or did you pay for it with cash?” The word “credit” also refers to recognition of one’s efforts or praise for what one has done well: “Who should get the credit for the success of that presentation?” The phrase “to have (something) to (one’s) credit” means to have accomplished something: “This job applicant doesn’t have a graduate degree, but she has more than 10 years of work experience to her credit.” Finally, the phrase “to be a credit to (someone)” means to perform very well so that others are proud of oneself: “Francine has very good manners that are a credit to her parents and family.”

strike

In this podcast, the phrase “a strike against (someone)” refers to something that makes it more difficult for someone to do well, or an obstacle to success: “Your last mistake is a major strike against you, so don’t do anything like that ever again.” In baseball, a “strike” happens when a batter tries to hit the ball, but misses: “If the ball is coming in too low, don’t swing at it or else you’ll get a strike.” In bowling, a “strike” happens when someone hits all the pins with one throw of the ball: “How many points is a strike worth?” Finally, a “strike” is a period of time when workers refuse to work because they disagree with management: “The factory is closed this week, because the workers are on strike to demand higher pay.”

Culture Note
Alternative Data Used to Establish a Credit History

Credit reports and “credit scores” (a number summarizing one’s credit report) are extremely important for Americans, because they are use for “everything from” (a wide range of things, including) housing applications, job applications, to determining insurance rates. Most people “build their credit history” (establish a reputation for how responsibly they use borrowed money) by having credit card accounts, car loans, “mortgages” (loans to buy a home), “student loans” (loans to pay for an education), and more.

However, some people do not use credit in these ways. They might be “wary” (untrusting) of banks and other financial institutions, or they might simply prefer to conduct their “transactions” (the exchange of money for goods and services) “in cash” (with paper and coin money). Or they might simply be young adults who haven’t yet established a credit history. In these cases, not having a credit history results in a poor credit score.

People who do not have a credit history can present “alternative data” to show whether they “handle” (deal with) credit responsibly. This alternative data could include “rent” (money paid to live in an apartment or home) and “utility” (services like gas and electricity) payments, which are not normally reported to “credit bureaus” (the organizations that collect information for credit reports and calculate credit scores).

Lenders can use this alternative data to “assess” (make a judgment about) how responsibly an individual has paid back money in the past and determine that individual’s “credit worthiness” (how likely one is to pay back money in the future and whether one should be lent money now).

Comprehension Answers
1 - a

2 - a