Financial Planning for Women  Christine Ballard, Jessica Okey  Family Life Center Housing and Financial Counseling Center 1

Housing & Financial Counseling Center 493 N. 700 E. Logan At the bottom of Old Main Hill Family Life Center

Budget PlanningDebt ManagementCredit UseLife Stage ResponsibilitiesBankruptcy Intervention Financial Management

Power Pay   Stop borrowing or charging until debts are paid off  Make power payments. As one debt is paid off, move that payment to another debt rather than spending it on something else.  Saves money in interest and pays debts faster.

Home PurchaseResponsibilities of Home OwnershipMortgage DefaultReverse Mortgage Housing Counseling

CREDIT HISTORIES

 What are the three major credit bureaus?  TransUnion, Equifax, Experian  Where can you get your free credit report each year?   Who can look at your credit report?  Employers, creditors, insurance companies, government agencies, landlords, YOU.

What is a credit history?  Definition: A continuing record of a borrower’s debt commitments and how well they have been honored. 8

How do you build a credit history?  Time and good behavior  Start with a low limit credit card  Small loan  Pay on time  Use less than 30% of your credit limit. (10% recommended)  Pay off student loans  “You don’t have to carry over a balance, but you do need to use it.” –Rod Griffin, Experian 9

Other ways if you can’t get credit  Try a co-signer  Try a secured credit card – make sure they report to a credit bureau  Document proof of paying rent, utilities, insurance, etc. as an alternative form of credit 10

Fair and Accurate Credit Transactions Act 2003  Gives every consumer the right to their credit report free of charge every year.  Creates a national system of fraud detection.

Annual Credit Report  The central site to request a free credit report once per year per credit bureau including Experian, TransUnion, and Equifax: 

Three Major Credit Bureaus EXPERIAN EXPERIAN ( ) EQUIFAX TRANS UNION

Who Can Look at Your Credit Report? 1.Creditors – new and current 2.Employers & prospective employers 3.Insurance Companies 4.Government Agencies 5.Anyone else with a legitimate business reason (ie. landlords) 6.You 14

What is in a Credit Report? 1.Identifying information 2.Credit information 3.Public record information 4.Inquiries 15

What you need to look at  Potentially negative items: zero is good  Open accounts: close any you aren’t using  Status of accounts: open/never late is good. May show closed, past due, maxed out limit etc. 16

Likelihood of Errors  79% of all individual credit files contain mistakes (typos, incorrect dates, data entry errors)  25% contain serious mistakes that may cause credit denial 21

Find wrong information?  Contact credit bureau  It will come off if it’s not yours  Is it your mistake?  Spouse could have taken on debt  Company name is different than you recognize 22

Find Wrong Information?  Can write 100 word explanation that goes out with credit report. Example: Business went bankrupt  Information falls off after 7 years, 10 years for bankruptcy

Top Reasons for Bad Credit  Job loss  Separation or divorce  Previous bankruptcy  Maxed out cards  Illness  Tax liens  Bounced checks  Victim of crime or fraud  Other 24

Top Reasons for Credit File Problems  Late or missed payments  Delinquent items now paid not removed  Bankruptcy  Collections  Family members with similar names  All cards or leases are not listed  Incorrect information on file  Too many credit inquiries  Victim of Fraud 25

Credit Score  G.P.A is for report card…  FICO=Fair Isaac Company  Scores range from  Average is 678  Most scores are in the 600s-700s 26

FICO Score  Score is based on:  Payment history (35%)  Outstanding loan balances (30%)  Length of credit history (15%)  Inquiries (10%)  Types of credit (10%) 28

Warning Signs of identity Theft  Not receiving credit card or bank statements  Denied credit for no apparent reason  Getting bills from companies you don’t recognize  Credit collection agencies collecting on debts that don’t belong to you

What to do if you are a victim  Place a fraud alert on your credit report  Close accounts that you know or believe someone has tampered with or opened fraudulently  File a report with local police  File a complaint with FTC

Be Aware of Scams  Debt relief  Relief may come from filing for bankruptcy  This is considered a last resort, stays on credit report for 10 years!  Credit repair scams  Claims to repair your credit are just not true.  Only time, effort and a plan to repay your debt will improve your credit report. 31

Have you learned anything? Q: How do you dispute wrong information on your credit report? A: Contact Credit Bureau. They will research this and if it’s not yours, they have to take it off. Q: What is the estimated percentage of credit reports that have wrong information on them? A: 79%. 29% of these errors can result in a denial in credit. 32

Have You Learned Anything? Q: What is one thing you can do yourself to increase your credit score? A: Pay bills on time, correct errors, give it time. Lenders want to see at least 2 years of good history. 33

Upcoming FPW programs  August 13 Property Insurance  Local insurance agent Jane Larsen will discuss home and auto insurance  September 10  Late Savers Retirement Guidebook 34