1To Your Credit Objectives By the end of this unit, you will be able to: Describe the purpose of a credit report and how it is used. Describe the purpose of a credit report and how it is used. Order a copy of your credit report. Order a copy of your credit report. Read your credit report. Read your credit report. Identify ways to build and repair your credit history. Identify ways to build and repair your credit history.

2To Your Credit Credit Report (Handout Sample Report) A credit report is a record of how you have paid your debts. It tells lenders: Who you are. Who you are. How much debt you have. How much debt you have. Whether you have made payments on time. Whether you have made payments on time. Whether there is negative information about you in public records. Whether there is negative information about you in public records.

3To Your Credit Credit Reporting Agencies Equifax Equifax Experian Experian TransUnion TransUnion

4To Your Credit Information in a Credit Report Identifying information Identifying information Credit history Credit history Inquiries from creditors and other authorized parties Inquiries from creditors and other authorized parties Public record information Public record information

5To Your Credit Public Record Information Negative Information Time on Credit Report General civil judgments 7 years from date filed Tax liens Collection accounts 7 years from date paid 7 years from last activity Chapter 13 bankruptcy 7 years from date of discharge Chapter 7 bankruptcy 10 years

6To Your Credit Personal Bankruptcy New law requires credit counseling prior to filing New law requires credit counseling prior to filing Chapter 13 Chapter 13 Debtor keeps all property Debtor keeps all property Makes regular payments Makes regular payments Debtor must have regular income Debtor must have regular income Chapter 7 Chapter 7 Debtor must give up certain property Debtor must give up certain property Debtor may keep what is needed in support of dependents Debtor may keep what is needed in support of dependents

7To Your Credit How Your Credit Report Is Used Information in your credit report may determine whether you will: Get a loan or other form of credit. Get a loan or other form of credit. Get a job. Get a job. Rent an apartment. Rent an apartment. Get insurance. Get insurance.

8To Your Credit Reasons a Loan Application May Be Denied No credit history No credit history Past credit problems Past credit problems Negative information in public records Negative information in public records

9To Your Credit Credit Score The credit score is: A number that predicts how much of a credit risk you will be. A number that predicts how much of a credit risk you will be. Calculated based on information in your credit report. Calculated based on information in your credit report. Check your credit score before applying for new credit.

10To Your Credit FICO Score Fair Isaac Company developed computer model. Fair Isaac Company developed computer model. Compares and ranks YOUR score Compares and ranks YOUR score Scores range from about 300 to 900. Scores range from about 300 to 900. Takes into account: Takes into account: Past payment history – 35 percent Past payment history – 35 percent Outstanding debt – 30 percent Outstanding debt – 30 percent How long you've had credit – 15 percent How long you've had credit – 15 percent New applications for credit – 10 percent New applications for credit – 10 percent Types of credit – 10 percent Types of credit – 10 percent

11To Your Credit VantageScore Was introduced in March Was introduced in March Three credit reporting agencies use the same scoring system. Three credit reporting agencies use the same scoring system. Scores range from 501 – 990. Scores range from 501 – 990. Grades A, B, C, D, F. Grades A, B, C, D, F.

12To Your Credit Inquiries and Your Credit Score When you apply for credit, you authorize the lender to ask for a copy of your credit report — an inquiry. When you apply for credit, you authorize the lender to ask for a copy of your credit report — an inquiry. Your credit score may drop if you apply for new credit. Your credit score may drop if you apply for new credit. Most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time.

13To Your Credit How to get a free Credit Report You are entitled to 1 free credit report per year from EACH of the THREE credit bureau You are entitled to 1 free credit report per year from EACH of the THREE credit bureau Request one copy, every four months, rotating requests to different reporting agencies Request one copy, every four months, rotating requests to different reporting agencies Your “credit score” will not be on your report, you have to pay for this Your “credit score” will not be on your report, you have to pay for this

14To Your Credit Other Reasons to Get a Free Credit Report You are also entitled to a free credit report if: A company takes adverse action against you AND you ask for your report within 60 days of receiving notice of the action. A company takes adverse action against you AND you ask for your report within 60 days of receiving notice of the action. You are unemployed and plan to look for a job within 60 days. You are unemployed and plan to look for a job within 60 days. You are receiving public assistance. You are receiving public assistance. Your report is inaccurate because of fraud, including identity theft. Your report is inaccurate because of fraud, including identity theft.

6/13/ Credit Unit - Mrs. Claxton Information in a Credit Report Identifying information Identifying information Credit history Credit history Inquiries from creditors and other authorized parties Inquiries from creditors and other authorized parties Public record information Public record information

Information Not in a Credit Report Race, gender, religion, national origin Driving record Income Checking/Savings balance Purchases made with cash or check Medical history Business account information

6/13/ Credit Unit - Mrs. Claxton How Your Credit Report Is Used Information in your credit report may determine: if you get a loan or other form of credit if you get a loan or other form of credit if you get a job if you get a job if you can rent an apartment if you can rent an apartment insurance rates you pay insurance rates you pay admittance to a University admittance to a University

6/13/ Credit Unit - Mrs. Claxton How to get a FREE Credit Report You are entitled to 3 free credit reports per year You are entitled to 3 free credit reports per year Request one copy, every four months, rotating requests to different reporting agencies Request one copy, every four months, rotating requests to different reporting agencies Your “credit score” will not be on your report, you have to pay for this Your “credit score” will not be on your report, you have to pay for this

Offer applies with enrollment in Triple Advantage

6/13/ Credit Unit - Mrs. Claxton Credit Reporting Agencies Experian* Experian* Experian Eqifax* Eqifax* Eqifax TransUnion* TransUnion* TransUnion *Read website carefully before clicking!

Experian Credit Bureau web site 6/13/ Credit Unit - Mrs. Claxton

No “free” lunch 6/13/ Credit Unit - Mrs. Claxton

6/13/ Credit Unit - Mrs. Claxton

6/13/ Credit Unit - Mrs. Claxton

There is only one truly FREE Credit Report

Free Annual Credit Report

27To Your Credit Check for Errors Review your credit report regularly to make sure there are no errors in it. Review your credit report regularly to make sure there are no errors in it. If you think there is an error, write a letter to the credit reporting agency. If you think there is an error, write a letter to the credit reporting agency.

28To Your Credit Identity Theft Identity theft occurs when thieves steal your personal information and use it to: Open a new credit card account. Open a new credit card account. Write checks in your name. Write checks in your name. The unpaid credit card bills or bad checks can damage your credit history.

29To Your Credit The Truth About Credit Repair No one can remove accurate information from your credit report. No one can remove accurate information from your credit report. It can take years to repair your credit. It can take years to repair your credit. No one can create a new identity for you. No one can create a new identity for you.

30To Your Credit The Truth About Credit Repair (Continued) Legitimate companies provide a service BEFORE requesting payment. Legitimate companies provide a service BEFORE requesting payment. You can order your credit report yourself. You can order your credit report yourself.

31To Your Credit Debt Management Plan It is NOT credit counseling. You deposit money each month with the credit counseling organization. You deposit money each month with the credit counseling organization. Your creditors may agree to lower your interest rates or waive certain fees. Your creditors may agree to lower your interest rates or waive certain fees. You must make regular, timely payments. You must make regular, timely payments.