Credit  When goods, services, and/or money is received in exchange for a promise to pay back a definite sum of money at a futre date.  Lender: the person or organization who has the resources to provide the individual with a loan.  The borrower pays interest or other fees back in addition to the amount borrowed.

Credit Reports  A record of a consumer’s credit history.  Credit History: A record of transactions in involving the use of credit.  No credit history  No Credit Report  A positive credit report informs lenders the consumer is financially responsible  A negative credit report could reflect a financially irresponsible consumer.

Information on a Credit Report  Name and aliases  Current and past addresses  Marital status  DOB  Employment history  Public Record  Judgments, criminal and bankruptcy

 Payment history  Credit cards, store cards, book clubs, music clubs etc.  Financial records  Loans, past and current accounts, bounced checks, miscellaneous fees, etc.  Loans/leases:  Rent-to-own contracts, payday loans, lease agreements, etc.  Number of credit inquires  How many requests for your credit records done by businesses you apply to for credit.

Building a Credit History  Important for planning on purchasing big things like homes!  Affects your ability to Rent a home or buy a car.  May affect employment opportunities

How do you do it?  Get a store card (JC Penny’s or Sears)  Gas card  Small loan from a bank or credit union

Not affect your credit history  Not having any credit accounts in own name  Paying cash for all major purchases  Paying phone and utility bills on time

Positive Credit History  Good Banking  Paying bills consistently  No Bankruptcy  No criminal record  Small amount of debt  Don’t apply for a lot of credit  Low number of cards  Check credit report for errors  Maintain reasonable amounts of unused credit

General Rule  Keep the amount of credit used to 25% of total credit available or less!  $1000 of available debt  $250 or less.  Viewed as people who manage their debt well.

Negative Credit History  Bounced checks  Pays bills late  Criminal record  Large amount of debt  High number of credit inquires  Too many store and credit cards  Defaulting on a loan  Too many unused cards  Over limits  Not paying your utility bills on time

Credit Reporting Agency (CRA)  Keeps records of a consumer’s credit transactions and compile credit reports.  Equifax  Experian  TransUnion

CRAs  Get their info from  Stores  Credit Card Co.  Mortgage lenders  Banks  Landlords  Utility accounts  Cell phone Co.  Delinquent accounts

Requesting a Credit Report  Can request one any time  Fair and Accurate Credit Transactions Act  1 free credit report each year from each of the 3 main bureaus  Does not include the scores!  Go to

Mistakes in Credit Reports  Contact the bureau with the incorrect info  They have 30 days to investigate  If not complete they must remove the information  If error is found, must be removed  If correction is refused to be made, you can add a statement to your account in 100 words or less.  Most negative info removed within 7 years.  Bankruptcy takes 10 years.

Credit Denial  If you have been denied credit  You receive notice within 60 days for the reason from the credit bureau with the bad report  You can request a free copy of your credit report at that time as well.

Debt Repair  Can someone else just repair your debt…  They will try… For a fee  You can do the same thing without them and be just as successful!  There is no immediate fix for bad credit.

Credit Scores  A mathematical tool created to help a lender evaluate the risk associated with lending customer money.  Numeric GRADE!  Range from 150 – 850  Depending on the Bureau giving the score

How does this score affect you?  Affects the interest rates of loans  Car  Mortgage  Consumer credit  Ability to receive loans  Affects insurance rates  Affects your ability to get a job

Conclusion  The contents of a credit report have an impact on you the consumer  Negatively  Positively  You are in charge of your credit report  Keep a good credit history  Check your credit reports