To educate young people who know little or nothing about credit before they get out of high school, the D.C. Housing Finance Agency this spring launched the "Credit Chat Room Seminar."

"A major stumbling block is no credit or bad credit," said Tia Matthews, public relations manager for HFA, who conducted a recent seminar. "We want to get to young adults to alleviate bad credit so when they’re ready to purchase a home, they don’t come across an obstacle."

The HFA sent out letters and public service announcements to youth organizations all over the District explaining what the free seminars cover. Matthews said the 30-minute seminar begin with a brief introduction and then explain what credit is, why it is important to have, what it means to have credit and what you can do with it.

"As an agency dedicated to increasing the number of homeowners in Washington, we know the impact bad credit can have on an individual’s ability to purchase a home," Milton Bailey, executive director of the D.C. Housing Finance Agency, said in a press release. "Therefore, we have developed this seminar to teach young adults the importance of credit, before they make bad financial decisions. We believe by breaking the cycle of bad credit, more young adults will be on the correct path to homeownership."

Matthews said the seminars are designed for an unlimited number of high school juniors and seniors and put the concept of credit into terms they can understand. She said they have plays showing real life situations dealing with credit, as well as a "Cash or Credit?" game in which the players view a list of items and decide whether it is better to pay with cash or credit. The participants go through a list of credit do’s and don’ts and have time to ask questions.

The HFA has held four seminars so far this year at different youth organizations, including Port Hope Independent Living Initiative Program and Sasha Bruce.

Mindy Thiel, licensed social worker at Port Hope, said the youth involved in their organization are required to attend life skills classes each week. She said Port Hope decided to participate in the credit seminars because young people sometimes respond more to people from the community who come in and talk about the importance of things like credit.

"It’s an important tool because it’s the first time most of them have dealt with any kind of banking and finance," Thiel said. "A lot of [the youth] didn’t realize how complicated credit is and learned to appreciate that more."

Thiel said the program provided participants with a fact sheet on credit; stickers, magnets and brochures to take home with resources and information for further reference. They also received a sample copy of a credit report, which they were taught how to read.

"The information was presented in a very student-friendly environment," Thiel said. "We hope they use it to establish good financial habits."

Matthews said the seminars end with five key messages that her agency definitely wants the participants to walk away with:

• * paying bills on time and keeping debts at a manageable level shows that you are creditworthy and can be trusted to pay back borrowed money;
• * bad credit decisions can remain a part of your credit history for up to 10 years and cause you to be denied credit cards and personal, car and mortgage loans;
• * repairing bad credit is possible;
• * checking your credit report is essential to ensure there are no inaccuracies
• * credit fraud is widespread, but if properly handled, you can work with creditors to have fraudulent transactions removed.

Melinda Jackson, program director for Sasha Bruce Youthwork, said her organization helps young people get job skills as well as their general education development (GED) degree. She said the seminar given by HFA was "very informative" and was able to hold the attention of the 12 participants who attended.

"We decided to participate in this program so the young people can be informed on why maintaining good credit is important and how to maintain good credit," Jackson said.

The 17 to 24 year olds who attended the seminar "learned things they did not know before, and we would definitely want to hold another one," she said.

"We have gotten tremendous feedback. Most of the kids who leave are amazed at what power their credit has, how they have to protect it, what little they knew about credit and what they can do with credit," Matthews said. "This is a wonderful tool that we have. We know they’re going to be on the right track because they’ve learned these lessons young."

Copyright 2003, The Common Denominator