To Your Credit: Credit Reports and Credit Scores Presented by: Gina DeNardo Financial Wellness coordinator EMERGE Community Development

Credit Scores vs. Credit Reports FICO Score Trans Union Vantage Score Experian Equifax

What is a Credit Score for? Your credit score is an indicator of your creditworthiness. This number was designed to indicate how likely the borrower is to repay a loan The FICO score was first introduced in 1989 by FICO, then called Fair, Isaac, and Company. The FICO model is used by the vast majority of banks and credit grantors, and is based on consumer credit files of the three national credit bureaus: Experian, Equifax, and TransUnion.

What Credit Scores are used for Good credit helps with Purchasing a home Purchasing a car It may be checked by Landlords Potential employers Insurance companies Cell phone companies Utility companies

How Credit Scores are determined Like a GPA, a credit score is a cumulative number that measures your success relative to others, in this case grading you as a credit-worthy individual. This number is based on information listed on your credit report. . A snapshot – like a river metaphor

What Makes Up A Credit Score 35%

FICO Score Credit Risk 800+ Exceptional 740-799 Very Good 670-739 Good 580-669 Fair 579 & Lower Poor VantageScore Grade Credit Risk 900-990 A Super Prime 801-900 B Prime Plus 701-800 C Prime 601-700 D Non-Prime 501-600 F High Risk Remember, no score is ever hard and fast. Lenders often tweak scoring algorithms to fit their business models.

What is the average Credit Score? Vantage Score breaks it down: Mankato, Minnesota — 706 Rochester, Minnesota — 705 Minneapolis, Minnesota. — 704 FICO The national average FICO score is at an all-time high at 695, compared to 688 in October 2005.

What is included in the score and what is not Yes Credit Cards Auto/Personal Loans Mortgages Late payments Collections/Judgements Liens Bankruptcy NO Gender/Race/Age Income Utilities Insurance Rent payments Employers Payday & Title Loans

How to read a credit report 4 main categories: Personal ID Info Public Records Credit Accounts Inquiries Handout

How can I get a better score? GET THE GOOD STUFF GOING! Pay your bills on time Maintain balances at 30% or lower than available credit Apply for traditional credit (including credit cards or bank loans). Dispute incorrect information Pay off negative accounts -You don’t need to carry a balance, credit can be FREE! -Before applying for credit, decide you are using this as an asset (to build good credit) and not to buy stuff -A mix of credit does not mean applying for every credit card and using it once, be thoughtful and selective when applying for a credit card -There are many organizations and business who have created “Credit Builder Loans” these are a good option for someone starting out – or who has collections on their credit Ignoring your credit can cost money! - A collection can turn into a judgement (if you don’t show up for court to dispute – they win)

How To Dispute an item on my report Can be done on-line or by mail If you dispute something, the creditor has 30 BUSINESS days to confirm the debt. If they can’t, the information needs to be taken off your report.

How can I get a free Credit Report? www.AnnualCreditReport. com If you have been denied a: Credit card Loan Insurance Job Housing You should receive a letter explaining how to get your free report.

“Free” Credit Score Often they give you a Vantage score, not your FICO score. If they ask for your bank/credit card information they may be signing you up for a monthly service that you will be paying for! Only use these sites if you are comfortable having them share your information with other companies!

Questions? Gina DeNardo Financial Wellness Coordinator EMERGE Community Development DeNardoG@EMERGE-MN.org Questions?