C REDIT H ISTORY A ND R ATINGS 1 Copyright © Texas Education Agency, All rights reserved.

2 “Copyright and Terms of Service Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1)Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the Texas Education Agency; 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of the Texas Education Agency; 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way; 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty fee. Call TEA Copyrights with any questions you have.

Objective: Understand and Manage Credit Responsibly Define and know the components of a credit report. Recognize ways to better their credit history and rating. Understand what credit history is and why it is important. Know what to do if they have an inaccurate or fraudulent report 3 Copyright Texas Education Agency, All rights reserved.

KEY TERMS Credit Credit History Credit Rate Credit Report Equifax Experian FICO 4 Copyright Texas Education Agency, All rights reserved.

Credit – an amount of money, or something of value, that is loaned or trust and with the expectation that it will be repaid at a later date. 5 Copyright Texas Education Agency, All rights reserved.

Credit History – record of your personal financial transactions. Used synonymously with credit report. 6 Copyright Texas Education Agency, All rights reserved.

Credit Rate – the numerical value calculated from a credit report that is used by creditors to help determine whether to give you credit. 7 Copyright Texas Education Agency, All rights reserved.

Credit Report – contains all of the information related to your finances, such as payment history and amounts owed. Used synonymously with credit history. 8 Copyright Texas Education Agency, All rights reserved.

Equifax – One of the three major credit reporting agencies that maintains information about your credit history. 9 Copyright Texas Education Agency, All rights reserved.

Experian – One of the three major credit reporting agencies that maintains information about your credit history. 10 Copyright Texas Education Agency, All rights reserved.

FICO – the most popular credit score that uses a scale from about 300 to 850. FICO stands for Fair Isaac Company. 11 Copyright Texas Education Agency, All rights reserved.

TransUnion – One of the three major credit reporting agencies that maintains information about your credit history. 12 Copyright Texas Education Agency, All rights reserved.

What is in your credit score? Payment History Types of Credit Used New Credit Amounts Owed Length of Credit History 13 Copyright Texas Education Agency, All rights reserved.

Payment History Account payment information (credit cards, loans, mortgage, etc.) 14 Copyright Texas Education Agency, All rights reserved.

Amounts Owed Number of accounts with a balance, and how much owed on each; loans still owed 15 Copyright Texas Education Agency, All rights reserved.

Length of Credit History Time since accounts opened, and since last activity 16 Copyright Texas Education Agency, All rights reserved.

New Credit Number of recently opened accounts Number of recent credit inquiries Time since account openings and credit inquiries Re-establishment of positive credit history following past payment problems 17 Copyright Texas Education Agency, All rights reserved.

Types of Credit Used Number of various types of accounts (credit cards, loans, mortgages, etc. 18 Copyright Texas Education Agency, All rights reserved.

How is a credit score determined? A credit score is determined using the credit report… The score is calculated using the FICO scoring system. Every person is allowed one free credit report from each of the three major agencies per year (Experian, TransUnion, and Equifax) 19 Copyright Texas Education Agency, All rights reserved.

The Big Date Credit History & Ratings 20 Copyright Texas Education Agency, All rights reserved.

What is Identity Theft? One person, using information gathered from some source, takes on the identity of another person without permission and conducts a variety of activities using that identity. The intent is to use that identity for personal gain, generally with the intent to defraud others. 21 Copyright Texas Education Agency, All rights reserved.

Prevent Identity Theft Check your credit report Guard your social security number Pick passwords carefully Be careful what you throw away Shred important information 22 Copyright Texas Education Agency, All rights reserved.

What is NOT Identity Theft?  Someone using your credit card with your knowledge and consent to make a purchase  Someone properly exercising a legally granted power of attorney on your behalf  Someone making up a fake name and signing into a hotel—this may be a crime, but it’s not identity theft 23 Copyright Texas Education Agency, All rights reserved.

Four Key Points People are not helpless in protecting themselves from identity theft. Consumers do not bear the brunt of the loss. Internet use does not increase risk of identity fraud. Seniors are not the most frequent targets of identity thieves. Source: Javelin Strategy and Research 2006 Identity Fraud Survey Report 24 Copyright Texas Education Agency, All rights reserved.