Rachel and Max moved in together in January 2023. Rachel is your best friend, and you are very concerned as her boyfriend is a real spender and taking advantage of Rachels generous nature. As both you and Rachel are taking FINA 200, you decided to have a talk with her as she is ignoring some red flags. Use the information from the case for your responses.

Rachel:

• Is enrolled in Concordia Universitys JMSB program
• works part-time at the Bank of Montreal (14 hours/week at $21/hour, earning $13,000/year
• living pay cheque to pay cheque
• paying for her tuition from her Registered Education Savings Account (RESP)
• has $1,000 in savings for emergencies

Max:

• is doing his undergraduate degree at McGill in the Faculty of Medicine
• his parents are paying for his schooling as it is their wish for him to be a doctor (they have pressed Max to prepare a budget, but Max insists it is pointless as it varies month to month)
• studies little as his gaming is taking up a lot of his time for which he believes he can make money
• does not like to cook, relies on Uber Eats
• just applied for his third credit card as the other two were at their maximum limit

Rachel and Max:

• the utility bills and the lease agreement are in both their names

1. Max forgot again to pay his portion of the July 1^st rent. Rachel only found out when an angry landlord showed up at their door demanding an immediate e-transfer. As Max did not have any money, Rachel paid from her savings. This seems to be a pattern, as Max has not paid the utility bills either, with Rachel having to come to the rescue on a regular basis. Max thinks Rachel worries too much about finances. Max is confident that nothing will impact his credit and that the banks will love him once he graduates from either medical school or makes it big as a gamer. Based on the information provided, is Max correct about his credit? Give the reason to support your response. (1 mark-.5 marks each)
   1. Yes or No (highlight and underline your response)
   2. Reason:________________________________________________________________________________________________________________________________________________________________________________________________________

2.Through your own personal financial planning studies, and as Rachels best friend, you want to discuss the impact on her finances due to Maxs approach with his finances. Give two potential impacts on Rachel. (1 mark-.5 marks each)

a)Impact1:_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

b)Impact2:_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

3.Rachel argued with Max to order his credit report from either of the two Credit Bureaus which are ________________and________________. (.25 marks)

4.Explain to Max what a Credit Bureau is. (.25 marks)

Response:____________________________________________________________________________________________________________________________________________________________________________________________________________

5.Max is not interested in getting his credit report as he knows that this will harm his credit score. Is Maxs statement true or false? Explain what soft hits versus hard hits are to credit check queries. (.5 marks-.25 marks each

1. True or False (underline and highlight your response)

Response:___________________________________________________________________________________________________________________________________________________________________________________________________

6.What are two (2) examples of hard hits to credit checks? (.5 marks-.25 marks each

Example:__________________________________________________________________________________________________________________________________

Example:__________________________________________________________________________________________________________________________________

7. Max was tired of hearing Rachel ask him to apply for his credit report and made the request. Max knew that he would get a great rating and was pleased when the report finally came in with a Beacon Score of 350. What does this score represent? (.25 marks)

Response:________________________________________________________________________________________________________________________________________________________________________________________________________

8.Max no longer wanted to deal with his parents questions about budgeting. To have extra money, he decided to go to the bank to request a line of credit. The bank required someone to co-sign the loan. He asked Rachel to do so. What do you recommend to Rachel? Explain your response. (.5 mark -.25 marks each)

Yes, recommend or No, do not recommend (underline and highlight your response)

Response:_____________________________________________________________________________________________________________________________________________________________________________________________________

9.Max can easily improve his credit score. Provide him with three (3) ways that he can do so. (.75 marks -.25 marks each)

2. __________________________________________________________________________________________________________________________________________
3. __________________________________________________________________________________________________________________________________________
4. __________________________________________________________________________________________________________________________________________