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Maintaining A Good Credit Rating

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Maintaining A Good Credit Rating Powered By Docstoc
					Maintaining A Good Credit
          Rating
   Presented by Shaun Sykes
       Topics of Discussion:
• What is credit?
• Credit terms
• How does your credit become bad?
• Who monitors your credit rating?
• What are the consequences of having bad
  credit
• How long does you bad credit last?
• How can you improve your credit rating?
• Site to visit for credit information
                 What is credit?
• A contract to receive money, goods or services now,
  paying for them over time at an established interest
  rate.
• A sum of money or equivalent purchasing power, as
  at a shop, available for a person’s use.
• The positive balance in a person’s bank account.
• Commendation or approval, as for an act or quality.
• A person or thing serving as a source of good
  influence, repute, ability, etc.
• The quality of being believable or trustworthy.
• Belief in the trust, reliability, quality, etc., of someone
  or something.
                     Credit terms:
• Line of credit: A fixed           • Credit History: An important
  amount of money that a              record of each consumer’s
  company can draw against            historical usage and
  from a lender. A line of credit     payment of credit. Typically
  is usually for an unlimited         these records go back seven
  period of time.                     years, and they have a
• Credit account: A credit            tremendous impact on your
  system by means of which            choices for credit today.
  customers may obtain goods        • Credit card: A card issued
  and services before                 by banks, businesses, etc.,
  payment. Also called:               enabling the holder to obtain
  charge account                      gods and services on credit.
• Credit rating: An evaluation      • Credit Union: A cooperative
  of the creditworthiness of an       association whose members
  individual or business              can obtain low-interest loans
  enterprise.                         out of their combined
                                      savings.
  How does your credit become
             bad?
• Delinquent or slow payment of bills
• Prior history viewed by others
• Stolen credit cards, accounts or account
  numbers that are misused or abused
• Possible mistakes or errors made by the
  credit recording agencies
Who monitors your credit rating?
• Credit card issuers
• Auto Financing companies\College Loan
  issuers
• Insurance Companies
• Landlords
• Potential employers


Who keeps and gathers credit
 information?
• Credit Bureaus
   What are the consequences of
       having bad credit?
• You incur a bad credit rating   • Your name can be damaged
• You lose state and/or federal   • Your goods can be
  tax refunds                       repossessed
• Your wages can be               • You may need to have
  garnished                         others with good credit co-
• Inegibility for automobile        sign for you
  rentals                         • Legal action can be brought
• You receive lower credit          against you
  rating, which incur higher      • It takes a long time for you to
  interest ratings                  repair your credit, or bounce
• You are unable to finance         back from negative credit
  anything, such as a home,       • You may be denied credit
  automobile, a practice, etc.      from other agencies
    How long does your bad credit
               last?
•   Inquiries – 2 years
•   Late payments – 7 years from month that late payment was due
•   Charge-offs – 7 years
•   Collection Accounts – 7 years
•   Lawsuits and Judgments – 7 years or until the governing statue
    of limitations expires
•   Bankruptcy - (Chapter 7) – 10 years
•   Bankruptcy - (Chapter 13) – 7 years
•   Paid Tax Liens – 7 years from date of payment
•   Unpaid Tax Liens – Forever (unless paid)
•   Foreclosures/Repos – 7 years from foreclosure or repo date
•   Unpaid Federal Student Loans – Forever (unless paid, after
    which they can appear for 7 years)
How can you improve your credit
           rating?
• Get your credit history from a   • Consolidate your debts into
  credit bureau, review it and       one payment
  work on repairing it             • Take your debts to debt
• If mistakes are found, write       management or credit repair
  the credit bureau to have the      companies (find out what
  mistakes corrected                 services the business
• Devise a re-payment plan           provides and what it costs
  and make payments and              first)
  pay-offs on things you owe       • File for bankruptcy – used a
• If you locate credit fraud on      last resort (Chapter 7 and
  your accounts, notify the          Chapter 13)
  credit bureaus immediately       • Contact creditors and devise
• As for credit cards – use          a workable plan with them
  them less, hide them and if      • Start paying back on time –
  all else fails cut them up         you will avoid interest
                                     payments
       Websites to investigate:
• Personal credit history: Equifax
  www.equifax.com
• Experian (formerly TRW) : www.experian.com
• TransUnion: www.transunion.com
• Providian Financial Corporation:
  www.providian.com
• Free Credit Report Service:
  www.consumerinfo.com
  www.freecreditreport.com
• Credit repair articles: http://creditinsiders.com
        Topics of Discussed:
• What is credit?
• Credit terms
• How does your credit become bad?
• Who monitors your credit rating?
• What are the consequences of having bad
  credit
• How long does you bad credit last?
• How can you improve your credit rating?
• Site to visit for credit information

				
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posted:5/16/2012
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