Credit Reports and Credit Scores

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Credit Reports and Credit Scores By Julie Chapman For.

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Presentation transcript:

Credit Reports and Credit Scores By Julie Chapman For

Credit Reports All consumers who use credit have a credit report Three Major Credit Bureaus: Equifax Transunion Experian

What does it include? Personal Information Name, Address, Social Security # Employment - current and former Account Information -what you owe now or open accounts and payment history Public Records – liens, judgments, bankruptcies

What does it include? Inquiries - when you applied for credit Public Records – bankruptcies, liens

What is NOT included? Bankruptcies > 10 years old Gender, Ethnicity, Religion, Political affiliation, medical history, or criminal records Credit Score

Who can look at my credit report? Potential Lenders and Credit Card Companies Landlords Insurance Companies Employers or Potential Employers Anyone with your written authorization

Credit Scores Rating used to help a lender decide if you qualify for a particular credit card, loan or service Different than a credit report! Estimate of the risk a company assumes for lending you money

Credit Scores FICO score is most commonly used. VantageScore is a recently created score used by the 3 major credit bureaus. Higher Score = Less Risk Math model that evaluates many types of info in your credit file including your credit report.

Credit Scores What is in a FICO score? Graph is from www.myfico.com

Credit Scores What is in a Vantage score? Graph is from www.myfico.com

What affects your credit score? Payment History Late payments How long payments have been late Number of late balances Number of accounts paid off on time Bankruptcy Write-offs Collections From www.myfico.com

What affects your credit score? Amounts Owed Types of accounts owed Number of accounts owed Proportion of balances owed to credit limit From www.myfico.com

What affects your credit score? Length of Credit History Time since account opened Time since activity on account From www.myfico.com

What affects your credit score? New Credit Number of recently opened accounts Number of recent credit inquiries Re-establishment of positive credit history following payment problems From www.myfico.com

What affects your credit score? Types of Credit Used Number of various types of accounts From www.myfico.com

Credit Scores FICO scores range from 300 – 850 680 used to be considered very good. Now 720. Majority 600 – 700

Vantage scores range from 501 – 900 A: 900–990B: 800–899C: 700–799D: 600–699F: 501–599

Credit Reports & Credit Scores Both are used to assess risks of loan money, hiring, leasing to, etc. Some use only the credit score, but often other factors are considered.

Credit Reports & Credit Scores Recommended to check credit reports and scores once a year with each credit bureau: Equifax Transunion Experian

Credit Reports & Credit Scores Law requires 1 free credit report per year per bureau. Must be requested. Go to the following site to request www.annualcreditreport.com