Money Matters workshop sponsored by the Kansas City Public Library Credit Money Matters workshop sponsored by the Kansas City Public Library

What you will learn What is a FICO Score How to review a credit report How to improve your credit Choosing a credit card Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Myths About Credit Bad credit is beyond repair Credit can be repaired quickly Credit cards are the fastest way to bad credit I have no need for credit Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

What Is Credit? The ability to borrow money Revolving Credit Installment Credit Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Four Cs of Credit Capacity- How long have you held the same employment; income stability Capital- Manage your money; what assets do you have Character- Past credit behavior Collateral- Secure your loan Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Choosing a Credit Card Credit Card Agreement Annual percentage rates (APR) for: Purchases Balance transfers Cash advances Penalty APR, and when it applies Fees, such as annual fees Grace period, if there is one Computing your balance Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Credit Score Is a number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time Mathematical formula Impact of credit scores Rent/Shelter Deposit (cell phone and utilities) Employment Pay for credit Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Scoring Models FICO Vantage Fair Isaac Corporation Model that is used by most lenders Easier to get loans Fair Scoring range 300- 850 Fairly new (2006) Model created by the 3 credit bureaus Single score for all three bureaus Scoring range: 300-850 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Scoring Models Payment History (35%) Whether a credit account has been paid on time. Amounts Owed (30%) How much debt is owed and if you are overextended. Length of credit history (15%) Long term positive credit relationships show good credit management. New Credit (10%) Asking for multiple credit accounts in a short period is a sign of financial strain. Type of credit (10%) Having both credit cards and loans being paid on-time shows your money management skills. Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

FICO Scores 800 or Higher 20% of U.S. consumers Demonstrate to lenders that the consumer is an exceptional borrower 700 to 799 Demonstrate to lenders that the consumer is a very dependable 670 to 739 FICO scores are near average Considered by lenders to be good scores 580 to 669 The lowest 40% Lenders will approve credit applications within this score range Lower than 580 The lowest 20% Lenders consider the consumer to be risky Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Credit Report A credit report is a record of your credit activities 3 Credit Bureaus Transunion Experian Equifax Free Credit Report www.annualcreditreport.com Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Credit Report Additional Credit Reports Unemployed and plan to look for employment in the next 60 days Receiving public assistance Have been the victim of fraud, including identity theft  Have had adverse action taken because of information in your credit report Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Credit Report Review 5 sections of a credit report   5 sections of a credit report Header/Personal information Public Record Collection agency account information Credit account information Inquiries made to your account Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Header This includes your name and current address, as well as other identifying information, like your SSN, Date of Birth, and places lived. Name Jennifer Doe Date of Birth xx/xx/xxxx Social Security Number 000/00/0000 Current Address 920 Main Street Kansas City Mo 64105 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Public Records Public record of a financial record including bankruptcies, judgements, and liens Type Judgement Date Filed 12/01/2015 Case Number/ Docket 123456 Court Address Jackson County Court Downtown KC Plaintiff Time Warner Defendant Jennifer Doe Amount 300 Date Reported 01/01/2016 Date Satisfied 03/01/2016 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Credit Account Current and previous accounts Company names Account numbers Date opened Last activity Type of account Status Date closed if the account is no longer open Credit limit Items as of date (currently owed, current or late payments) balances Past due amounts Date reported to credit agencies Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Credit Account (cont.) Car Company 63rd street Kansas City Mo Phone Number: 816-000-0000 Account Number 123456789 High Credit Balance 20,000 Account Owner I Credit Limit Terms of Frequency Monthly/60 months Type Account Installment Status Pays as Agreed Amount Past Due Late Payment 30 60 90 Actual Payment Amount 365.00 Date Closed Date of Last Activity 06/01/2016 Date of Delinquency Dated Verified 06/2016 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Collections All accounts that are with collection agencies and status of those accounts Visa 123 ABC RD Kansas City MO 64130 816-111-2222 Account Number 123456789 Credit Limit 1500 Balance 1800 Account Owner I High Credit 1600 Terms of Frequency Type Account Revolving Status Past Due Amount Past Due Late Payment 30 60 90 90 days Actual Payment Amount Date Closed Date of Last Activity Date of Delinquency Dated Verified 03/2016 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Inquiries Companies that have looked at your credit report Basis for promotional rates Date Company Name 01/04/2016 Visa 09/01/2015 Fingerhut Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Disputing Inaccurate Information Consumers have a right to challenge inaccurate information on their credit report Credit agencies have 30 days to investigate Cannot dispute accurate information Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Improve Your Credit Pay your bills on time Keep balances or credit limits low (30%) Apply for and open new lines of credit when you need them Monitor your credit report Length of time that you have had a relationship with a creditor counts Have a mix of types of credit – revolving and installment Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Establish Credit Consider a secured credit card Apply for a credit card with a co-signer Apply for retail and gas credit cards Obtain a loan from a credit union Become an authorized user on another account Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Scams Be careful of ads offering debt relief Advance-Fee loan scams Credit repair scams Guard your credit Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Debt What is debt? Secured debt Unsecured debt Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Tackle Your Debt Take responsibility for your debt Develop a budget Save to pay large debts Take advantage of extra money opportunities Earned Income Tax Credit Settlements Contact your creditors and negotiate Set up a payment plan Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

References and Resources Federal Trade Commission www.consumer.ftc.gov Tools: Money and credit, loans and dealing with debt, identity protection Consumer Finance Protection Bureau www.consumerfinance.gov Submit complaints and financial tools Credit Card:  http://www.creditcards.com/glossary/term-balance-transfer.php#ixzz3kbxgYu00 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

References and Resources Experian MythBusters http://blog.equifax.com/credit/mythbusters-how-credit-impacts-your-daily-life/# My Fico www.myfico.com/crediteducation FDIC www.fdic.gov/consumers/consumer/moneysmart/ Financial curriculum based on building financial skills Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

H&R Block Business & Career Center At the Kansas City Public Library 3rd floor of Central Library, 14 W. 10th St. 816-701-3717 www.kclibrary.org/business-career Books on personal finance, job hunting, small business development Personal finance: Budgeting, credit, investing, real estate, identity theft Personal finance website (Sign up for more workshops on this website) Computers with software for resume and business plan writing Resources for nonprofit development Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Financial Opportunity Centers Women’s Employment Network 920 Main St, Suite 100 Kansas City, MO 64105 P: 816-595-1302 Guadalupe Centers Inc. 2600 Belleview Kansas City, MO  64108 P: 816- 472-4120 Prosperity Center 5151 Troost Avenue, Suite 100 Kansas City, MO 64110 P: 816-501-4239 Community Services League 404 N Noland Rd Independence, MO 64050 P: 816-254-4100 Financial Opportunity Centers Ask Me How I Can Help One-on-one counseling Financial Coaching Budgeting Setting future financial plans Tools for rebuilding credit Accountability