2 Jon Ross – Union Privilege vice president IntroductionsJon Ross – Union Privilege vice presidentUnion Privilege develops and manages credit education programs for union membersGerri Detweiler - Consumer credit expertDedicated consumer advocate ensuring that credit practices better serve, inform and protect consumers3,000 + interviews including CNN, The New York Times, Dateline, Readers Digest and the Today ShowTestified before Congress
3 Poll: What is your biggest credit concern? Credit card debtMortgage debtPoor credit scoreAuto loan debtStudent loan debt
4 How to Get and Keep Good Credit Why Good Credit is So ImportantSmart Credit Card StrategiesSteps to Better CreditDebt Reduction Strategies
5 How Credit Impacts You Approval for personal loans/credit Interest ratesHome and auto insurance premiumsMortgage insuranceDaily ATM withdrawal limitsDeposits on utilitiesJobsRenting a home
6 Knowledge + Action = Savings If all consumers raised their scores by just 30 points,savings would be $16.4 billion.
7 Raise Your Credit Score From 680 to 710$200,000 mortgage: 6.095% to 5.811%Savings: $432 a year$20,000 auto loan: 8.272% to 7.148%Savings: $168 a yearAuto insurance: $100 good credit discountSavings: $100 a year$10,000 credit card: 19.8% to 12%Savings: $780
9 Poll: Have any of these happened to you? Charged a late feeCharged an overlimit feeRate raised after a late paymentRate raised for no apparent reasonNone of the above
10 Credit Card Fees Late fees as high as $39. Penalty interest rates as high as 30%. Often triggered by SINGLE late payment, overlimit or returned check.Universal default - “any time, any reason” - raises credit card rates to as high as 30%.Reduced credit limits = overlimit fees or lower scores.
11 Smart Credit Card Strategies Read your statements for due date, APR & credit limitPay cards as soon as you get the billSet up online payments and alertsSpeak up if changes do occurBuild good credit for the best deals
12 How Credit Scores WorkFICO Score Basics35% payment history - recent most important30% debt - high utilization15% length of credit history10% new credit10% types of credit
13 3 Steps to Better CreditReview Your Credit Report and Address NegativesBuild PositivesMonitor and Maintain
14 Step One: Review Credit Report 3 Steps to Better CreditStep One: Review Credit Reportand Address NegativesUnderstand reporting periodsDispute inaccuraciesNegotiateLet time heal the wounds
15 Step Two: Build Positives 3 Steps to Better CreditStep Two: Build PositivesPositive credit references paid on timeMix of credit typesDon’t close old accountsAuthorized users bewareSecured credit card
16 Step Three: Monitor and Maintain 3 Steps to Better CreditStep Three: Monitor and MaintainCheck your credit report free: AnnualCreditReport.comConsider credit monitoringSet up online bill payment
17 Poll: How concerned are you about debt? Not concerned – I don’t carry much debtSomewhat concerned – I’d like to be able to pay it all offVery concerned – it is stressful and I don’t know what to doExtremely concerned – I’m in deep trouble
18 How to Cut Debt Build A Plan Write down all debts/rates/payments Track spending for one monthPay highest rate unsecured debt firstCommit to a fixed repayment amountKeep your eye on the prize!
19 Accelerate ResultsNegotiate with current issuersTransfer balances to lower ratesShop for better deals if neededAdd extra $$
20 Example: two credit cards 1. $5000, 16%, min. payment $125 The Cost of DebtExample: two credit cards1. $5000, 16%, min. payment $1252. $2000, 19.8%, min. payment $8019 years/11 months to pay off$6,682 in interest
21 Action = ResultsNegotiate/transfer both rates down to 12%Add extra $25/monthKeep level payment of $225/monthStop chargingTotal interest drops to $1,427Paid off in 3 years and 2 months
22 Other OptionsConsolidate With…?Personal LoanHome EquityRetirement Plan $Credit Counseling
23 You can do it!Start today!Create a planWatch for trapsGet help if needed
24 Help from Union Privilege UnionDebtHelp.comUnionPlus.org/CreditEducationUnionPlus.org/SaveMyHomeUnionPlus.org/BudgetingUnionPlus.org/CreditScoreUnionPlus.org/SecuredCard
25 Questions and AnswersVisit UnionPlus.org/CreditCounselingSpeak with a credit counselor: