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Credit_Reports_July_2008

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

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Family Life Center

Housing & Financial Counseling Center

493 N. 700 E. Logan At the bottom of Old Main Hill 435-797-7224

Financial Management
• Budget Planning • Debt Management • Credit Use • Life Stage Responsibilities

• Bankruptcy Intervention

Power Pay
 www.powerpay.org
 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 Purchase
• Responsibilities of Home Ownership • Mortgage Default • Reverse Mortgage

CREDIT HISTORIES

 What are the three major credit bureaus?
 TransUnion, Equifax, Experian

 Where can you get your free credit report each year?
 www.annualcreditreport.com

 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.

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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
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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

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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:
 www.annualcreditreport.com

Three Major Credit Bureaus
EXPERIAN www.experian.com 888-EXPERIAN (397-3742) EQUIFAX www.equifax.com 800-685-1111 TRANS UNION www.transunion.com 800-888-4213
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Who Can Look at Your Credit Report?
Creditors – new and current Employers & prospective employers Insurance Companies Government Agencies Anyone else with a legitimate business reason (ie. landlords) 6. You 1. 2. 3. 4. 5.
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What is in a Credit Report?
1. Identifying information
2. Credit information 3. Public record information

4. Inquiries
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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.

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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

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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

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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

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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

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Credit Score
 G.P.A is for report card…  FICO=Fair Isaac Company
 Scores range from 300-900
 Average is 678  Most scores are in the 600s-700s

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

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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.
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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.
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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.

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Upcoming FPW programs
 August 13 Property Insurance
 Local insurance agent Jane Larsen will discuss home and auto insurance

 September 10
 Late Savers Retirement Guidebook

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