2. Your parents can’t fix everything
How to rescue your credit —before it needs saving!

3. Begins when you choose and use credit services
Your credit history
Begins when you choose and use credit services
Influences your ability to obtain products and services—and how much they’ll cost you
Credit cards
Car loans/leases
Private student loans
Mortgages, leases
Employment

4. Your credit history matters!
A good credit history will help you access services to improve your quality of life
A bad credit history will hold you back–and your missteps will follow you for as long as 10 years

5. How it works
Three credit reporting companies update and distribute consumers’ information: Equifax, Experian and TransUnion
Consumer applies
for credit
Creditor requests information about consumer’s financial history
Credit profile used to determine whether to authorize credit—and if so, at what interest rates
Consumer is granted (or denied) credit
Credit grantor reports activities back to credit reporting companies every 30 days
Credit reporting companies update consumer’s information

6. 2 4 1 3 5 What is a credit report? Prepared by
Lists the type of credit a consumer uses, the length of time the accounts have been open, and whether the consumer has paid their bills on time
Prepared by
credit reporting companies for use by credit grantors and other parties with permissible purpose
Tells lenders how much credit a consumer has used and whether they are seeking new sources
Summary of a consumer’s financial reliability
Details a consumer’s credit history as it has been reported 1 3 5

7. Types of credit reports
Lists all inquiries including limited inquiries and account reviews
Only consumers can request this version
Consumer disclosure
(Consumer version)
Subscriber report (Credit grantor version)
Abbreviated version of consumer credit report that creditors see
Does NOT contain limited inquiries or account reviews
Contains credit inquires

8. Elements of a credit report
What is in a credit report?
What is NOT in a credit report?
Identifying information
Credit history
Inquiries
Race
Gender
Religion
Sexual orientation
National origin
Medical history
Checking or savings account balances
Income
Driving record
Report card

9. How can you get a copy of your credit report?
You get one free report every 12 months from each of the three bureaus!
Visit AnnualCreditReport.com to download
You can also get free reports at CreditKarma.com

10. What is a credit score?
Sum calculated by vendor and used by lenders as an indicator of how likely consumer is to repay loans
Snapshot in time of the consumer’s current financial situation
Generated by a mathematical formula
Each credit grantor has its own strategy for interpreting the credit score
If credit is denied after reviewing the score, credit grantors must disclose reasons for the decision

11. What’s in a credit score?
What’s calculated in a credit score?
What is NOT calculated in a credit score?
Payment history
Outstanding debt
Credit account history
Recent inquiries
Types of credit used
Demographic information Age, race, religion, national origin, gender, sexual orientation, marital status, residence, child/family support obligations
Employment information Salary, occupation, title
Other credit information Interest rates charged by other credit grantors, usage of a credit counseling company

12. What are the Five Parts that go into a Typical Score
What are the Five Parts that go into a Typical Score? What Percent for each part?
New credit: 10%
# of recently opened accounts
# of recent inquiries
Payment history: 35%
Account payment information
Adverse public records
Amount of delinquent accounts
Number of past due items
Credit history length: 15%
Time since accounts opened
Accounts owed: 30%
Outstanding balances on accounts
Proportions of balances to total credit limits
Proportion of installment loan amounts
Types of credit used: 10%
# of various types of accounts

13. What’s a good credit score?
Very
poor
Poor
Fair
Very good
Good
Typically the higher the score the better
Individual credit grantors decide range of acceptability
For example, a consumer’s credit score might be 680
Based on this particular model, here is how the consumer may be viewed by a certain lender
300
900
400
500
600
700
800
You are here

14. Credit management tips
The single most important component of your credit score is whether you make payments on time
Your parents can make a payment for you.
Your parents cannot make a late payment not late.
A late payment stays on your credit history and impacts your credit score for as long as 7 years. However, the impact lessens as time passes.

15. More credit management tips
Set goals
Clean up your records
Check your credit report every three months
Improve your credit score 50 points or to above 650
Reduce your debt balances to below 35% of available credit limit
Create a budget and stick to it
Dispute negative inaccuracies on your credit report
Remove expired debts and collection accounts
Consider refinancing
Guard against identity theft

16. Top 5 misconceptions
Your credit score will drop if you check your credit report 1
Closing old accounts will improve your credit score 2
Once you pay off a negative record, it is removed from your credit report 3
Being a co-signer doesn’t make you responsible for the account 4
Paying off a debt will add 50 points to your credit score 5

17. If you find a mistake…
First, correctly identify inaccurate information
Next, contact the credit grantor responsible for the inaccuracy and try to resolve the issue
If this does not work, contact the credit reporting company(s) reporting the inaccurate information
Credit reporting company(s) will investigate the issue
At the conclusion of the investigation, or within 30 days, you’ll be contacted
You have the right to dispute inaccurate information on your credit report

18. What questions do you have?

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