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          2011      4                  financial
                                       resource guide

Did you know that your credit score is
perhaps the most important piece of
financial information about you? Your
report and score can determine whether
or not you can get a loan or open a bank
account, the interest rate on your loans,
the down payment required to activate
utilities, your ability to rent a house or
apartment and, in some cases, whether or
not you will be hired for a job opportu-

Your credit score is the score derived
from your credit report. This number is
supposed to predict the likelihood that
you will fulfill your credit obligations as   employers, and lenders are seeing when       if you’re on welfare, or if your report is
agreed. Generally, more recent informa-       they review your credit report. In some      inaccurate because of fraud, including
tion has greater weight on determining        cases, there may even be errors on your      identity theft (
your score. However, bad or “negative”        report that are negatively affecting your    HOW DO I IMPROVE MY
accounts on your credit report (such as       credit score and this is a great opportu-    CREDIT SCORE OR MAINTAIN
bankruptcy or accounts in collection)         nity to correct them and improve your        A GOOD SCORE?
may appear on your report for up to 7-10                                                   There are several ways to either improve
                                              credit rating!
years in general. Scores range from 500                                                    your credit score or maintain an already
(poor) to 850 (excellent). The higher         There are several other ways to obtain       high credit score. They include the fol-
your credit score, the better rates you       a free credit report. Under federal          lowing:
will get on loans, especially on a car or     law, you’re entitled to a free report if a
                                                                                           •   Pay your bills on time! This is
home!                                         company takes adverse action against
                                                                                               the number one way to improve
                                              you, such as denying your application for
HOW DO I GET A COPY ON                                                                         your score. Because most bills are
                                              credit, insurance, or employment, and
MY CREDIT REPORTS?                                                                             recurring, meaning they come every
                                              you ask for your report within 60 days of
Did you know that you are entitled, by                                                         month, this is the most consistent
                                              receiving notice of the action. The notice
law, to one free credit report per year                                                        way to show that you are a respon-
                                              will give you the name, address, and
from each credit reporting agency?                                                             sible borrower and are financially
                                              phone number of the consumer report-
Visit or                                                            stable.
                                              ing company. You’re also entitled to one
call 1-877-322-8228 to obtain your free
                                              free report a year if you’re unemployed      •   Keep your account balances low.
report TODAY! Please review your
                                              and plan to look for a job within 60 days,       By keeping your balances on credit
report. It can’t hurt to know what banks,

    NAME                                         ADDRESS                                  WEBSITE

    Experian                                     PO Box 9556                    
    NCAC                                         Allen, TX 75013

    Equifax Information Services                 PO Box 740256                  
                                                 Atlanta, GA 30374

    TransUnion                                   PO Box 2000                    
    Customer Disclosure Center                   Chester, PA 19022-2000
    TransUnion Consumer Relations

    cards low, you show potential lend-      •   Review your credit reports! Some-       ONLINE CREDIT
    ers that you are not relying too heav-       times, credit reporting agencies        RESOURCES
    ily on credit to survive financially.        make errors on your credit report.
    It also shows that when you do use           Most of the time, these errors are      Free annual credit report from
    credit, you are able to pay it back in       unintentional. However, they can        3 credit reporting agencies

    a short period of time, making you           have an adverse effect on your FICO
    a much more attractive borrower.             score. So, it is very important to       Federal Trade Commission
    Typically, you want to keep an ac-           know what is on your credit reports     (consumer protections)

    count balance of no larger than 30%          and to fix anything on them that is
    of your available credit.                    inaccurate by writing to the appro-     Fair Isaac Corporation, the primary
                                                 priate credit reporting agency. You     credit scoring agency. Obtain
•   Limit the number of new credit                                                       FICO score for $15.95
                                                 should review your credit report for:
    accounts you open. The more
    credit accounts you open, the riskier        –   Errors                              CredAbility, formerly Consumer
    you appear and this may harm your                                                    Credit Counseling Services, offers
                                                 –   Accounts that are not yours
    credit score. Avoid opening un-                                                      free counseling
    necessary accounts, such as depart-          –   Reported late payments that
    ment store credit cards (even if they            were actually on time               FINRA Investor
    offer you 15% off your purchase!).                                                   Education Foundation
                                                 –   Debts that you have paid
    In the event that you do open new                                          
                                                     off that are listed as still
    credit accounts you may be better                                                    National Foundation for Consumer
    off keeping them open and not using                                                  Credit (assists with helping find organi-
                                                                                         zations that offer credit counseling)
    them than closing the account, as            –   Old debts (collections) that are
    this shortens your credit history,               still being reported but should
    which can also harm your score.                  not be
                                                                                         Federal Reserve Bank of San Francisco
    Taking out student loans and loans                                         
    to purchase an asset, such as a car or                                               resources and tips about credit
    home are not nearly as harmful as
    new credit cards.
       2011      6               financial
                                 resource guide

    IMPROVE YOUR                      REVIEW YOUR                    PROTECT YOUR                     LIVE WITHIN
     CREDIT SCORE                    CREDIT REPORT                     IDENTIFY                       YOUR MEANS

•   Pay bills on time (the       •    Make sure there are no     •   Shred ALL documents          •   Create a monthly
    best way to improve               errors on your report.         with your personal               budget and stick to it!
    your score).                                                     information on them
                                 •    If you discover an er-         instead of putting them      •   Do NOT open new
•   Keep credit card ac-              ror, contact the credit        in the trash.                    credit accounts unless it
    count balances low (no            reporting agency im-                                            is absolutely necessary.
    larger than 30%).                 mediately in writing.      •   Do not give out your
                                                                     personal information to      •   SAVE, SAVE, SAVE! Al-
•   Limit the number of          •    Make sure all accounts         ANYONE unless it is a            ways pay yourself first.
    new credit accounts               on your report are             reputable organization.
    you open.                         yours.                                                      •   Prioritize your monthly
                                                                 •   If you bank, pay bills, or       bills and pay the most
•   Do NOT file for bank-        •    Make sure the same             shop on-line, do not use         important bills first.
    ruptcy unless you HAVE            negative account or            obvious passwords and            Start with your home
    to. Consult a non-                “charge-off” does not          periodically change your         and utilities and work
    profit credit counseling          appear on your report          passwords.                       down from there.
    service (i.e. CredAbil-           more than once.
    ity) before making that                                      •   Do NOT give out your         •   Avoid high-interest loan
    decision. Remember,          •    Learn the laws around          personal informa-                products. Shop around
    bankruptcy stays with             Fair Credit Reporting.         tion over the phone if           for the best interest
    you for 10 years and                                             someone calls you, even          rates and repayment
                                 •    Get your free credit                                            terms.
    can hinder your ability                                          if they claim to be from
                                      reports every year from
    to buy a car, find a place                                       your financial institu-
                                      www.annualcreditre-                                         •   Never sacrifice a NEED
    to live, obtain credit,                                          tion.
                                                                                    for a WANT. Remem-
    and gain employment.
                                                                 •   Always review your               ber, WANTS come and
                                 •    If you are denied credit                                        go. NEEDS are forever.
                                                                     financial statements.
                                      for any reason, obtain
                                                                     If you can, review
                                      your free credit report
                                                                     your statements on-
                                      from the reporting
                                                                     line. They are usually
                                      agency within 60 days.
                                                                     updated in real-time,
                                 •    If you are on TANF             allowing you to catch
                                      or a victim of fraud or        errors quickly.
                                      identity theft, you are
                                                                 •   Do NOT carry your
                                      also entitled to a free
                                                                     social security card in
                                      credit report.
                                                                     your wallet or leave it
                                                                     in your car. Keep it in
                                                                     a secure place and only
                                                                     get it when you need it.

                                                                 •   Do NOT respond to
                                                                     unsolicited emails. De-
                                                                     lete them immediately.


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